“If you print up $3 trillion of new money and give it to people, you get inflation, and that’s pretty much what happened,” said John Cochrane, a senior fellow at the Hoover Institute. That’s because much of the run-up in inflation came from pandemic-induced supply chain disruptions and unusual spikes in demand. In fact, many economists say it may not have even been necessary to raise interest rates to the highest level in 22 years in order to achieve that goal. In many ways, it was easy to get inflation down from its peak. So, getting that number down to the Fed’s 2% target should happen in no time, right?įed officials predict it will take two more years to get to a firm 2%, according to the Fed’s latest Summary of Economic Projections. The Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures price index, measured 2.6% annually in November.
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