Evaluating Our Inflation Gurus

Source: Independent Institute
by Randall G Holcombe

“Back in June, Federal Reserve Chair Jerome Powell said the mid-year spike in inflation was temporary, and John Williams, President of the Federal Reserve Back of New York, said he expected inflation in 2021 to be around 3% for 2021. These are the people who are in charge of managing inflation. At the time, I said I expected 2021 inflation to be above 5%, and that we could look at the numbers at year-end to see whose estimate was closer. As you probably know, the 2021 inflation rate came in at 7%, the highest it’s been since 1982. … Six months ago, the attitude of our inflation gurus was that it was temporary and would take care of itself. One sign of progress is that Chairman Powell now says the Federal Reserve will use its tools to combat inflation.” (01/13/22)