Whatever it takes

Watching yesterday’s post on the Federal Open Market Committee (FOMC) press conference with Fed Chairman Jay Powell, I feel that we saw a chairman chastened by a resounding early loss in battle to his greatest enemy (inflation) but full of steely resolve to reverse the tide and win the war. Chairman Powell opened his remarks by saying,

“Inflation is much too high, and we understand the hardship it is causing, and we are moving expeditiously to bring it back down. We have the tools we need and the resolve to bring back price stability to American families and businesses.”

The Chairman, in his usual straightforward and thoughtful manner, stated that the restoration of price stability, “is why we (The Fed) are here.”

I took from those opening remarks that, just as the Fed promised and delivered “whatever it took” to prop up and increase aggregate demand and employment during the 2007-2009 Financial Crisis and the 2020 Covid crisis, now they were going to take that approach to restoring price stability. However, this time the Fed would be taking away as opposed to giving to.

 

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