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Fed Tightens Months Late, Even as it Attacks Liquidity

Updated: Dec 8, 2021

December 18, 2021 | Several years back, at a conference in Cancun, Mexico, sponsored by the Association for Private Enterprise Education, we were gently chided by none other than John Taylor, for suggesting that then Fed Governor Janet Yellen was not sufficiently worried about inflation. "Are you suggesting that Dr. Yellen is not concerned about inflation?" he growled.

Years later, our worries about now Treasury Secretary Janet Yellen’s weak focus on price stability appear to have been prescient. Of note, Yellen finally acknowledged that inflation was a problem last week when she said it was time to stop characterizing inflation as temporary. Sadly, Janet Yellen remains an inflationist for whom full employment is the only mandate in Humphrey Hawkins.