Jerome Powell of the Fed: Oops, inflation is not transient

Federal Reserve Chairman Powell admitted during a hearing of the Senate Banking Committee in Washington on Tuesday that the normalization of ultra-accommodative monetary policy should be considered at the next meeting, as the economy is very strong and the pressures inflationary rates are higher. The president also said it is time to stop using the word "transient" to describe inflation and that the recent emergence of the omicron variant poses "downside risks to employment and economic activity and greater uncertainty for the 'inflation' . The Fed decided on Nov.3 to begin reducing the monthly pace of its net asset purchases by $ 10 billion for Treasuries and $ 5 billion for agency mortgage-backed securities by completing the process in mid-2022.

So, in the end, even Powell has to admit that there is an inflation problem, but what inflation? The "European" one due to an explosion in the prices of raw materials, or the "Good" one due to full employment? Because the difference is not secondary.

Inflationary alarms have been on for more than a month now. After all, inflation is 6.2%,

Now a number of famous economists who supported the idea of ​​transient inflation will have to change their mind:

Three month core inflation. Why isn't everyone calling this a win for team transitory? pic.twitter.com/KB9EawJLo1

– Paul Krugman (@paulkrugman) October 13, 2021

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The article Jerome Powell of the FED: Oops, inflation is not transitory comes from ScenariEconomici.it .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/jerome-powell-della-fed-ops-linflazione-non-e-transitoria/ on Wed, 01 Dec 2021 07:00:51 +0000.