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Opinion
Nir Kaissar

Do You Think the Fed Hasn’t Done Enough? Think Again

Critics have accused the central bank of being too slow and too passive in its efforts to curb rising prices. The record suggests otherwise. 

In defense of Jerome Powell.

In defense of Jerome Powell.

Photographer: Win McNamee/Getty Images

The Federal Reserve is taking a lot of heat over its handling of the highest US inflation in four decades. Critics say that the central bank, which is expected to raise interest rates 75 basis points at its meeting on Wednesday, was too slow to recognize the problem and that it is still not doing enough to fight it. A close look at the record argues against that assessment.

The following table lays out the record going back to the beginning of 2020. It shows year-over-year growth for the consumer price index, the best-known measure of inflation, alongside that of the personal consumption expenditures price index excluding food and energy, the Fed’s preferred inflation tracker. It also shows the five-year breakeven inflation rate, a widely used gauge of expected inflation over the next five years derived from the difference between the yield on plain vanilla and inflation-protected five-year Treasuries. And finally, it shows the federal funds rate, the Fed’s primary tool for fighting inflation, and the yield on two-year Treasuries.