![]() “Will inflation be transitory? There are many reasons that the peaks we’ll see at the moment will be. But he also made clear that the moment is uncertain, and that “we’re humble about what we understand.”ĭealBook asked experts in economics, former government officials and critics of leaders’ current policies if they’re worried about the path ahead for inflation. Powell listed reasons to expect price pressures to fade: The data have popped thanks to statistical quirks and the end of lockdowns. “We’re trying to understand whether it’s something that will pass through fairly quickly or whether, in fact, we need to act.” Powell, the Fed chair, told lawmakers this week. “We’re experiencing a big uptick in inflation, bigger than many expected, bigger certainly than I expected,” Jerome H. But it can also erode purchasing power, deplete savings and, if it is severe enough, destabilize entire economies. Inflation can make debts easier to pay off and can give workers room to negotiate for higher wages. Which side is right - the sanguine or the fretful - will prove hugely consequential for everyday Americans. That could force the Fed to pull back its support for the economy to slow demand and to keep inflation under control, possibly plunging the economy back into recession. ![]() But some economists, and many Republicans, warn that today’s quicker increases could change consumer and business expectations, making it more likely that rapidly rising prices are here to stay.
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