It has suddenly become politically correct again to fight inflation. Only six months ago, neither Joe Biden nor anyone at the Federal Reserve would have dared to say that making price stability a priority also meant helping minorities and the poor. On the contrary, the Fed's assumed mission was to tolerate "a little" inflation in the hope of rebuilding the job market faster, turned upside down by the pandemic. Stimulating growth on credit, beyond any ordinary standard, to bring as many Americans back into the workforce as possible, was seen as progressive and appropriate, no matter what. The inflationary threat was not taken seriously.
Today, Joe Biden says he is making the fight against inflation his "
priority
".
And the American central bank is rediscovering the urgency of its primary mission of preserving price stability.
What has changed?
Inflation is back.
At its highest for thirty-one years, it is chipping away at purchasing power
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