MIT Golub Center for Finance and Policy

Inflation Needs a Short Leash and 4 More Lessons From the Fed’s Powell Era

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MIT GCFP - Viewpoints

BARRON'S | As chair of the Federal Reserve, Jerome Powell faced a number of concussive events: a pandemic at a scale the world hadn’t seen in the past century, the biggest inflation surge in decades, the highest import tariff rates in more than 90 years, and unprecedented pressure on the central bank’s independence.

The odds any Fed chair would face all four of those shocks within eight years is roughly .018%, or 1 in 5,550, according to Kristin Forbes, professor of global economics and management at MIT Sloan School of Management.

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(The GCFP does not make policy recommendations, and any opinions expressed are those of the authors and not the GCFP.)

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