Worries of Fed Policy Error Rising, Powell Opines On Crypto

The pressures are certainly rising on the Federal Reserve to respond to what looks like potentially significant inflationary forces in the economy and the fears of a policy error also appear to be rising with it. Larry Summers was a serious once-candidate (Yellen beat him) for Federal Reserve Chairman who has since fallen from grace in Biden policy circles. He says all Fed officials need to do to know they have their policy wrong is to walk outside. He says inflation is rising even faster than the levels that previously alarmed him. The treasury markets didn’t appear as shrill in their concerns as the former US Treasury Secretary.

Indeed, the Fed may have gotten the message as it appears to be ever so slightly elevating the prospect of ‘talking about talking about’ tightening, in the ultra-dovish parlance of today’s unified FOMC. St. Louis Bank President James Bullard said he thought we could adjust monetary policy once the pandemic was “largely behind us,” and that the time has not quite arrived, “but it does seem like we’re getting close.” The usually more hawkish Raphael Bostic also said that the Central Bank would have to “very nimble” in its response to the developing situation.

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