Will the Fed Do Enough to Bring Down Inflation?

Will the Fed Do Enough to Bring Down Inflation?

Inflation climbed even higher in November, new data show. The Bureau of Labor Statistics reports that the Consumer Price Index (CPI) grew 6.8 percent from November 2020 to November 2021, up from 6.2 percent year-on-year in the previous month. The CPI has grown roughly 4.1 percent per year since January 2020. It is currently 4.0 percentage points higher than it would have been if it had grown 2 percent over the period.

Figure 1. Consumer Price Index

While some economists continue to insist that all is well, those who have predicted persistent, high inflation all along are starting to take a victory lap. My own view falls somewhere in between. Monetary policy has not been an unmitigated disaster. It has been too loose, though. The Fed should…

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