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Ramesh Ponnuru

It’s Not the Fed’s Job to Stop Supply-Side Inflation

Central bankers should take responsibility for curbing excessive spending. But suppressing demand to fight a scarcity of goods would backfire on the U.S. economy.

Between rocks and hard places.

Between rocks and hard places.

Photographer: Michael Nagle/Bloomberg

Vladimir Putin has made Jerome Powell’s hard job harder.

Even before the Russian president launched his invasion of Ukraine, the Federal Reserve chairman was under pressure to fight inflation without causing a recession — a high-wire act in which this week’s small interest rate increase was the latest move. The war is sharpening the dilemma, raising prices further while weakening the economy. The first effect tempts the Fed to move faster in hiking interest rates, the second to move slower.