The Federal Reserve is on an inflation-busting campaign. During the September meeting of the Fed’s policy-making arm, the Federal Open Market Committee (FOMC), the committee’s members raised the benchmark federal funds rate by 75 basis points, to a target range of 3.0–3.25 percent, the highest level since 2008. According to the dot-plot—a survey of…
From Pandemic Relief to Transitory Inflation, How Did the Federal Reserve Get to This Point?
September 30, 2022
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Business & Marketseconomic policieseconomyFederal Reserveinflationinterest ratesjerome powellpandemic reliefrecessiontransitoryUS
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Former Treasury Secretary Says Fed ‘Lost Its Way’ Focusing on Social Justice Instead of Inflation
July 18, 2022
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Business & Marketseconomic policieseconomyFederal Reserve (Fed)high inflationinflationLarry Summerssocial justice warriorstransitoryUS
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Larry Summers, who served as treasury secretary under President Bill Clinton, has said the Federal Reserve failed to anticipate current inflation levels and that price increases can only be arrested by “dislocation” of the economy. “Frankly, I think in 2021, our central bank lost its way,” Summers said in a July 15 interview with Bloomberg’s “Wall…
Omicron Could Disrupt US Economic Recovery, Inflation No Longer ‘Transitory’: Yellen
December 3, 2021
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Business & EconomyeconomyinflationJerome Jay PowellOmicron variantSecretary Janet YellentransitoryUSUS News
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The new coronavirus variant Omicron may affect inflation rates and worsen existing supply chain disruptions leading to slower economic growth claimed U.S. Treasury Secretary Janet Yellen on Thursday at the Reuters Next conference. As the economy keeps recovering from pandemic-related restrictions, and life “returning towards normal” with “increased vaccination and booster shots,” Yellen said that…
Powell Says It’s Time to Retire Word ‘Transitory’ From Fed’s Inflation Narrative
Federal Reserve Chair Jerome Powell faced a grilling on the persistence of inflationary pressures during a Senate hearing on Nov. 30, with the central bank chief acknowledging that it’s “time to retire” the word “transitory” from the inflation narrative, noting that factors pushing inflation higher would stick around “well into next year.” Powell made the…
Fed’s Clarida Acknowledges ‘Much More Than Moderate Overshoot’ of Inflation Target
The Federal Reserve’s second-in-command, Vice Chair Richard Clarida, said on Nov. 8 that inflation this year has been far higher than the Fed expected, and while he still believes inflationary pressures are transitory and will dissipate “over time,” a longer run of elevated prices would amount to a policy failure on the part of the…
Dollar Hovers Near Recent Highs, Bonds Steady, Ahead of Expected Fed Stimulus Rollback Announcement
The dollar hovered near recent peaks and U.S. Treasuries held steady on the morning of Nov. 3 as investors await an expected Federal Reserve announcement later in the day about tapering the central bank’s massive bond-buying scheme. The DXY dollar index, which tracks the greenback against a basket of major rivals, traded largely unchanged on…
Inflation: Transitory or Permanent?
Inflation is still running high, and many still believe that it’s a temporary post-pandemic phenomenon. However, structural changes taking place in the economy suggest that prices may not go back to normal anytime soon. Some economists and investors have argued that excessive stimulus spending and money creation to fight the pandemic are the real culprits causing…
Failure to Bury ‘Transitory’ Inflation Narrative Risks Sparking Biggest Fed Error in Decades: Economist
Failure on the part of the Fed to toss its stubbornly-held “transitory” inflation narrative and act more decisively to rein in persistently high price pressures raises the likelihood the central bank will need to slam on the brakes of easy money policies much more forcefully down the road, risking avoidably severe disruption to domestic and…
Fed’s Quarles Warns Additional Government Spending Could Lead to Extended Period of Transitory Inflation
October 21, 2021
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Business & EconomyEconomieseconomyFederal Reserveinflationmortgage-backed securitiessupply chaintransitoryUSUS News
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Federal Reserve Gov. Randal Quarles on Wednesday warned that additional government spending being contemplated by the Biden administration could lead to “transitory” inflation continuing for too long. Speaking at a Milken Institute conference in Los Angeles, Quarles noted that the central bank has been increasing its holdings of Treasury securities and agency mortgage-backed securities by $120 billion a month since…
Yellen Defends Calling High Inflation ‘Transitory’ Even If It Sticks Around Longer Than Next Few Months
Treasury Secretary Janet Yellen waded into the “transitory” versus “persistent” inflation debate on Tuesday, insisting it’s reasonable to view the current price spike as temporary even if it doesn’t abate within the next few months. “Supply bottlenecks have developed that have caused inflation,” Yellen said an an interview on CNBC’s “Squawk Box” on Oct. 5….
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