The Middle Truth in the Inflation Muddle
Critics of the Federal Reserve argue that the acceleration of US inflation in early 2021, and the rapid disinflation of recent months, had nothing to do with monetary policy, because the sources of above-target price growth were all on the supply side. This view is both right and too simple.
BERKELEY – For precisely three years, the economics profession has been collectively fixated on inflation. February 2021, exactly 36 months ago, was the last time consumer-price-index inflation in the United States (all items, 12-month percentage change) was at or below the Federal Reserve’s 2% target.