Jón Steinsson believes that a painless disinflation is no longer plausible
The economics professor says that the Fed’s hard-won credibility is at stake
AFTER RISING steadily for over a year, inflation in America is now higher than it has been for four decades. On May 4th the Federal Reserve raised the federal funds rate by 0.5 percentage points. Jerome Powell, its chair, also indicated that further 0.5-percentage-point increases are likely in June and July. Together, these actions will constitute the fastest tightening of policy since the 1980s.
This article appeared in the By Invitation section of the print edition under the headline “Jón Steinsson believes that a painless disinflation is no longer plausible”
From the May 21st 2022 edition
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