Why Jerome Powell's historic shift to let America's economy 'run hotter' reprises former Fed chairman Arthur Burns' 1970s warning about the 'anguish of central banking'.
Washington | The Fed’s great 1980s inflation slayer, Paul Volcker, died last December, aged 92. Nine months on, the central bank's current chairman, Jerome Powell, has buried Volcker's legacy once and for all.
The decision to allow inflation to run above 2 per cent, formalised on Friday (AEST) after a near two-year review into how the world’s most important central bank conducts monetary policy, has again exposed both the limits of the Fed's powers and its desperate attempt to avoid succumbing to chronic “Japanification”.
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Jacob Greber writes about politics, economics and business from Canberra. He has been a Washington correspondent and economics correspondent. Connect with Jacob on Twitter. Email Jacob at jgreber@afr.com
