Appreciating your learned comments I believe you omitted the most important reason why Powell should be seen as a Great Chair. His short statement about the FED independence is among the crucial moments in the FED relation to the Executive.
Indeed! The Fed is the Congress's creation carrying out Congress's mandate. It is not supposed to follow the inflation policy preferences of the President.
The more poined question is did the Fed start reining in inflation soon enough? What would l have happened if it had raised rates in Sept 2021 (when TIPS rose > target) and or started more vigouous QT instead of march 2022?
Also, instead of just "predicting" that inflation would be temporary, the Fed could have committed to _making_ it temporary. It never quite escaped the "Fed fighting inflation" (and temporarily loosing the fight) syndrome, instead of saying outright that it was engineering temporary inflation to facilitte adjustment of relative prices to the COVID shock and would stop it at the right time.
Good questions. I understand why the Fed may have hesitated - vaccination rates were still relatively low, and the Omicron variant which brought a lot of uncertainty also emerged. That’s just naming a few issues they had when making decisions.
Appreciating your learned comments I believe you omitted the most important reason why Powell should be seen as a Great Chair. His short statement about the FED independence is among the crucial moments in the FED relation to the Executive.
Indeed! The Fed is the Congress's creation carrying out Congress's mandate. It is not supposed to follow the inflation policy preferences of the President.
That is another important positive that he had.
The more poined question is did the Fed start reining in inflation soon enough? What would l have happened if it had raised rates in Sept 2021 (when TIPS rose > target) and or started more vigouous QT instead of march 2022?
Also, instead of just "predicting" that inflation would be temporary, the Fed could have committed to _making_ it temporary. It never quite escaped the "Fed fighting inflation" (and temporarily loosing the fight) syndrome, instead of saying outright that it was engineering temporary inflation to facilitte adjustment of relative prices to the COVID shock and would stop it at the right time.
Good questions. I understand why the Fed may have hesitated - vaccination rates were still relatively low, and the Omicron variant which brought a lot of uncertainty also emerged. That’s just naming a few issues they had when making decisions.