Fed Criticism Is Cheap, and It’s Mostly Mistaken
The central bank should get more credit for the stable prices and low unemployment it has fostered over three decades.
Fed Chair Jerome Powell and Bank of England Governor Andrew Bailey during the Kansas City Fed’s Jackson Hole Economic Policy Symposium.
Photographer: Natalie Behring/Bloomberg
I have listened to people bellyache about the Federal Reserve my entire adult life: Alan Greenspan lowered interest rates too much after the dot-com crash in 2000. Ben Bernanke printed too much money to bail out banks during the 2008 financial crisis. Janet Yellen kept rates too low for too long in the mid-2010s. Jerome Powell was too slow to see inflation coming — and now he’s too slow to spot a recession.
Yet over those nearly three decades, the Fed has overseen a historic period of stable prices and low unemployment, interrupted only three times by forces largely outside the central bank’s control — namely, the twin speculative manias involving internet stocks and homes and the Covid pandemic. Each time, the Fed intervened boldly and under a hail of criticism to fend off a deflationary spiral and to shore up the job market.