Two Fed Officials Say 2020 Policy Guidance Lacked Flexibility

Federal Reserve Governor Christopher Waller and senior Fed policy adviser Jane Ihrig said guidance from Fed officials during the pandemic may have lacked sufficient flexibility to respond fast enough to rapidly rising inflation.

In a new research note posted on the Fed’s website Wednesday, the two officials looked at language from the central bank’s policy statements issued in September and December 2020 aimed at influencing the forward path of interest rates.