After getting inflation so wrong, can the Fed now get it right?
The hawks are taking flight
IT WAS A simple, stunning admission. “We have had price stability for a very long time and maybe come to take it for granted,” said Jerome Powell, chairman of the Federal Reserve, last month. Many factors explain the latest burst in inflation, with snarled supply chains, tight job markets, generous fiscal stimulus, loose monetary policy and, more recently, the war in Ukraine all part of the fabric. But one thread runs through them all. Investors, analysts and, crucially, central bankers believed that high inflation in America had been consigned to history, a problem more for academic studies than for current policy.
This article appeared in the Finance & economics section of the print edition under the headline “Hawks take flight”
Finance & economics April 23rd 2022
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