Powell’s Fight Against Inflation Is Already Working
If it’s this easy for the Fed to contain rising prices, then Congress should rest easy about spending more.
Looking for signs of inflation.
Photographer: Alex Wong/Getty Images North AmericaFaced with higher-than-expected inflation, Federal Reserve officials have spent the past couple of weeks outlining their plans to do something about it. That may not sound like much, but it’s already working: As it turns out, simply talking about reducing inflation can itself reduce inflation.
Specifically, Fed officials have indicated that they are likely to accelerate the winding down of their quantitative easing policy. Last week, testifying before Congress, Chair Jerome Powell made his clearest statement yet on the subject: “It is appropriate, I think, for us to discuss at our next meeting, which is in a couple of weeks, whether it will be appropriate to wrap up our purchases a few months earlier.”