Hot Economy, Rising Inflation: The Fed Has Never Successfully Fixed a Problem Like This

The Federal Reserve is getting down to do one thing it has by no means completed earlier than: cut back inflation rather a lot with out considerably elevating unemployment.

Central financial institution officers assume it’s doable with calibrated rate of interest will increase that sluggish booming demand simply sufficient to take steam out of an overheated financial system. But even one of many Fed’s closest allies, U.S. Treasury Secretary Janet Yellen, sees the danger of failure. “It will require skill and also good luck,” the previous Fed chair mentioned in public feedback in Washington final week.

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