Powell, Whatever You Do, Don't Say the ‘T’ Word
For months, Fed officials have been trying to convince the world that inflation is transitory. The Biden administration wants a simpler vocabulary.
How do you feel about “short-lived”? “Temporary”?
Photographer: Al Drago/BloombergIt's pretty unusual for a central banker in a consequential economy to get outflanked by politicians. That is the risk confronting Federal Reserve Chair Jerome Powell when it comes to the pace of rising prices, with potentially significant implications for the American and global economies.
The White House is shifting the way it talks about inflation, using plainer language that voters can better understand, Bloomberg News's Nancy Cook wrote. The move comes as polls show increasing concern about rising prices, and congressional Republicans try to use the issue to kill big spending programs. “Transitory,” a word favored by Fed officials to describe what they see as short-term spurts in inflation that don't warrant tighter monetary policy, has lost favor among Biden aides. U.S. consumer prices jumped in June by the most since 2008, pushing the rate to 5.4% from a year earlier.