Be careful what you ask for. From 2009 to the advent of the Covid-19 pandemic in 2020, central banks around the world tried almost every trick in the book to rekindle some degree of modest inflation, to little avail.

As the global economy recovers from the Covid recession, supply-chain disruptions and a quirky labor market have rendered that problem obsolete—at least for now. Speaking at Schwab Impact’s virtual event Tuesday, former Federal Reserve chairman Ben Bernanke offered some insights into the current Fed’s thinking and what would prompt it to change its view that the current wave of inflation was “transitory.”

Specifically, Bernanke said that if inflation were running at a 2.8% to 3.0% rate in late 2022, the Fed’s credibility would be at stake. He doubts that will happen, however.

“I’m hopeful [that] going into next year things will normalize and inflation will moderate,” Bernanke told attendees at the virtual event.

Mark Carney, former governor of the Bank of England and another participant in the event, said the question remains whether inflation expectations become “embedded” in the economy. “I would think inflation would come down in the U.S. in the second half [of 2022],” he said. At present, “it’s lower in Europe.”

Carney also didn’t think the current surge in inflation was entirely a bad thing. “I’d rather be in this position with growth strong” and inflation somewhat high, than in “a tepid economy” with prices “flat or falling.”

Carney was alluding to the post-financial crisis era when deflation, not inflation, was central bankers’ chief concern. Despite all the economic weakness following the housing bust, the U.S. moved to full employment over the last decade.

Asked about fears of stagflation, Bernanke said the term doesn’t characterize today’s bizarre economy accurately. “We’re having fairly strong growth, which is causing some inflation,” he said.

But inflation has been running at relatively high levels since the economy began reopening in the spring. The bond market appears to buy into the same scenario that Bernanke and his fellow central bankers see as the probable one—namely, that the bottlenecks in global supply chains and the recalcitrance in labor markets will eventually resolve themselves.

They may be right, but one question remains at what price. For example, the U.S. economy needs an estimated 80,000 more truck drivers and so far few applicants are responding to salary offers previous generations of truckers would have called generous.

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