It’s tempting to think that Fed Chairman Jerome Powell deserves the pickle he’s in: He ignored inflation as “transitory” when it wasn’t. Now — after one of the biggest policy blunders in recent Fed history — he needs to raise interest rates, maybe significantly.
But the timing couldn’t be worse: A necessary and significant rate rise would come amid global instability sparked by Russia’s invasion of Ukraine, and slowing the US economy could only strengthen Vladimir Putin’s hand.
Unfortunately, there’s no easy way out for Powell and the Fed, and you can bet he and his advisers are squirming over what to do. Nevertheless, don’t rejoice over Powell’s pain; it may be his fault and eventually he may be vilified for it, but it’s the American people who will be paying the price.
Only bad choices
That price, of course, is all the bad choices that…