No wonder the Fed has been playing catch up. After its September policy-making meeting, it will have raised the federal funds rate target by 275 to 300 basis points in less than six months.
Kudos to Powell for clearly laying out his goal and how he intends to get there. All that remains is to act, and to ensure that whatever led to this predicament won’t be repeated.
Bill Dudley, a Bloomberg Opinion columnist and senior adviser to Bloomberg Economics, is a senior research scholar at Princeton University’s Center for Economic Policy Studies. He served as president of the Federal Reserve Bank of New York from 2009 to 2018, and as vice chairman of the Federal Open Market Committee. He was previously chief U.S. economist at Goldman Sachs.