Opinion

The Fed’s words still don’t measure up to the challenge of inflation

The Federal Reserve’s recognition that inflation is not transitory, that the U.S. labor market is very tight and that priority now must be given to price stability is welcome, if belated. Without this pivot, entrenched inflation followed by a recession would be likely.

A recognition of the need to change direction, as manifest in the Federal Open Market Committee statement and Chair Jerome H. Powell’s news conference Wednesday, was necessary but not sufficient for successfully achieving price stabilization and sustained growth. I see grounds for substantial concern in both the intrinsic difficulty of the task at hand and in misconceptions that the Fed still seems to hold.