2 For example, Chair Powell, in testimony before the U.S. Senate, said, “We will use our tools to support the economy and a strong labor market and to prevent higher inflation from becoming entrenched” (Powell, 2022a).
This reasoning has a lengthy history, as evidenced by remarks in 2008 by then Vice Chair of the Board of Governors of the Federal Reserve System Donald Kohn: “As demonstrated by historical experiences around the world and in the United States during the 1970s and 1980s, efforts to bring inflation and inflation expectations back to desirable levels after they have risen appreciably involve costly and undesirable changes in resource utilization” (Kohn, 2008).