The Fed really does have all the tools it needs to stop inflation, but what Powell leaves unsaid is that using these tools could create a disaster. Powell, a former private-equity executive and member of the Fed's Board of Governors since 2012, is telling the truth - at least in a technical way. But despite this confidence, year-over-year inflation is running at 7%, the highest level since the early 1980s. "No one should doubt that we will use our tools to guide inflation back to 2%," he asserted during a speech in October, repeating the point this month as the Senate considered Powell's all-but-assured reappointment as Fed chairman. There is virtual unanimity among economists and politicians on the need to prevent this nightmare, and Powell has promised that the Fed can slay the inflation dragon. Inflation, when left unchecked, can feed into itself and create an economically ruinous and socially destabilizing spiral. Despite price inflation rising at the fastest pace in 40 years and an economy limping sideways out of the ruin of the pandemic, he keeps repeating one important point: The Fed has all the tools it needs to meet these mounting challenges, particularly inflation. Powell sounds calm and clinical when he talks about the frighteningly volatile economy. ![]() It often indicates a user profile.įederal Reserve Chairman Jerome Powell wants you to know everything is under control. Account icon An icon in the shape of a person's head and shoulders.
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