It seems that Powell wants to atone for his mistake of repeatedly calling inflation “transitory” for much of last year. Keep in mind that the Fed’s series of rate hikes are unprecedented in the “modern” era of central banking, i.e. after Alan Greenspan became Fed chair in 1987 and the Fed became far more transparent. Rate hikes raise the costs for companies to pay down their debt, increasing the possibility of corporate bankruptcies and defaults on commercial loans. As long as inflation remains the bigger issue for the economy, the Fed is going to focus more on getting prices under control.

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