Greg Ip in The Wall Street Journal says in a reversal from recent decades, the central bank would rather risk recession than higher inflation…(Wall Street Journal)
On the other side, the risks that the Fed is tightening too much look small, for now. As Mr. Powell repeatedly noted, even with the 0.75-point increase the Fed’s interest-rate target, at about 1.6%, is still quite low—negative in real terms, whereas longer-term real bond yields are now mostly positive. Mr. Powell indicated a recession was preferable to inflation’s getting out of control: “The worst mistake we could make would be to fail [at reducing inflation], which is not an option. You know, we have to restore price stability.”
