Powell’s Caution: A Critical Response to the Fed’s Inflation Misjudgment

Jerome Powell’s caution is crucial because the Fed’s earlier misjudgment of “transitory” inflation led to soaring prices and aggressive rate hikes. With inflation still above target and new risks like tariffs emerging, Powell now emphasizes patience and data-driven decisions to avoid repeating past mistakes. This careful approach aims to balance the risks of stalling growth versus letting inflation become entrenched, showing that humility and flexibility are now central to Fed policy

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