Fed Complacency Feeds Inflation – WSJ


    Inflation is a bigger challenge than the Federal Reserve acknowledges. It has already risen dramatically, and it is suppressing real wages. Expectations of further inflation have begun to influence wage demands, costs of production, supply-chain estimates, and business pricing strategies. Lower-income earners are being squeezed the most.

    It isn’t enough that the Fed says it will begin tapering its asset purchases, while it continues to hope that inflation will recede to 2% when supply shortages dissipate. The Fed must acknowledge that its monetary policy has been a source of inflation, and that it will need to raise interest rates more quickly than it presumed.


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