{"id":1476786,"date":"2022-05-16T13:30:48","date_gmt":"2022-05-16T17:30:48","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1476786"},"modified":"2022-05-16T13:30:52","modified_gmt":"2022-05-16T17:30:52","slug":"former-fed-chair-ben-bernanke-calls-feds-delayed-inflation-response-a-mistake","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/former-fed-chair-ben-bernanke-calls-feds-delayed-inflation-response-a-mistake\/","title":{"rendered":"Former Fed Chair Ben Bernanke Calls Fed\u2019s Delayed Inflation Response \u2018A Mistake\u2019"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">24<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fformer-fed-chair-ben-bernanke-calls-feds-delayed-inflation-response-a-mistake%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1476786&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div><img decoding=\"async\" src=\"https:\/\/dw-wp-production.imgix.net\/2022\/05\/GettyImages-521182678-scaled-e1652720952327.jpg?w=1200&#038;h=800&#038;ixlib=react-9.3.0\" class=\"ff-og-image-inserted\" alt=\"image\" \/><\/div>\n<p><span>Former Federal Reserve Chair Ben Bernanke said during a Monday interview that the central bank\u2019s delayed inflation response \u201cwas a mistake.\u201d<\/span><\/p>\n<p><span>The Fed had dropped its benchmark interest rate to near-zero levels at the outset of COVID-19 and the lockdown-induced recession in a bid to stimulate economic activity. Over the past few months, however, the Fed began <\/span><a href=\"https:\/\/www.dailywire.com\/news\/the-fed-jacks-key-rate-up-half-point-as-inflation-surges\"><span>aggressively increasing rates<\/span><\/a><span> in response to rampant inflation <\/span><a href=\"https:\/\/www.dailywire.com\/news\/inflation-worries-remain-near-record-highs-boding-poorly-for-economy\"><span>pressuring consumers<\/span><\/a><span>.\u00a0<\/span><\/p>\n<p><span>Bernanke \u2014 who directed the nation\u2019s monetary policy during the 2008 financial crisis \u2014 told <\/span><a href=\"https:\/\/www.cnbc.com\/2022\/05\/16\/bernanke-says-the-feds-slow-response-to-inflation-was-a-mistake.html\"><span>CNBC<\/span><\/a><span> that the Fed was too slow in tapering its quantitative easing regime.<\/span><\/p>\n<p><span>\u201cThe question is why did they delay that\u2026 Why did they delay their response? I think in retrospect, yes, it was a mistake,\u201d he said. \u201cAnd I think they agree it was a mistake.\u201d<\/span><\/p>\n<p><span>Bernanke, however, said that he sympathizes with current Fed Chair Jerome Powell\u2019s hesitance to raise rates in light of the Fed inducing a market correction in 2013 by floating a cooldown to its stimulus measures.<\/span><\/p>\n<p><span>\u201cOne of the reasons was that they wanted not to shock the market,\u201d Bernanke continued. \u201cJay Powell was on my board during the Taper Tantrum in 2013, which was a very unpleasant experience. He wanted to avoid that kind of thing by giving people as much warning as possible. And so that gradualism was one of several reasons why the Fed didn\u2019t respond more quickly to the inflationary pressure in the middle of 2021.\u201d<\/span><\/p>\n<p><span>Since the high and unpredictable inflation of the 1970s, the Fed has largely earned the public\u2019s trust in managing inflation. For most of the past four decades, inflation has remained relatively stable at or near the Fed\u2019s 2% target; however, with consumer price inflation now at 8.3%, the public wants to see the central bank take decisive action to address price levels.<\/span><\/p>\n<p><span>\u201cThere\u2019s a lot of support for the fact that the Fed is tightening now, even though obviously we see the effects in markets,\u201d Bernanke said. \u201cYou know, we\u2019ll see the effects in house prices, etc. So those are some ways in which the current situation I think is better because we learned a lot from the \u201870s.\u201d<\/span><\/p>\n<p><span>Indeed, 30-year fixed mortgage rates have surged past 5% \u2014 rendering homeownership <\/span><a href=\"https:\/\/www.dailywire.com\/news\/mortgage-rates-hit-highest-level-in-over-a-decade\"><span>more expensive<\/span><\/a><span> for American families. \u201cAs Americans contend with historically high inflation, the combination of rising mortgage rates, elevated home prices and tight inventory are making the pursuit of homeownership the most expensive in a generation,\u201d government-backed mortgage company Freddie Mac explained.<\/span><\/p>\n<p><span>Amid the various pressures facing the economy, leading business leaders \u2014 including Goldman Sachs Chairman Lloyd Blankfein \u2014 are <\/span><a href=\"https:\/\/www.dailywire.com\/news\/goldman-sachs-chief-warns-recession-risk-very-very-high\"><span>warning<\/span><\/a><span> that recession risks are \u201cvery, very high.\u201d<\/span><\/p>\n<p><span>\u201cIf I were running a big company, I would be very prepared for it,\u201d Blankfein said. \u201cIf I was a consumer, I\u2019d be prepared for it.\u201d<\/span><\/p>\n<p><span>Nancy Lazar \u2014 the chief global economist of investment bank Piper Sandler \u2014 <\/span><a href=\"https:\/\/www.dailywire.com\/news\/economist-warns-that-world-is-in-early-stages-of-very-significant-recession\"><span>told<\/span><\/a><span> Fox Business last month that the world is in the first part of a \u201cvery significant\u201d recession. She explained that economic activity in the United States \u201cwill feel very, very weak\u201d as growth slows down from last year\u2019s recovery.<\/span><\/p>\n<p><span>However, Lazar said that the Fed\u2019s higher interest rates would help to curb breakneck inflation in the United States.<\/span><\/p>\n<p><span>\u201cI think we are going to have significant goods deflation,\u201d she continued, pointing to the price of used vehicles as an example. \u201cWe\u2019ve seen used cars decline 6% just in a few months.\u201d<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Former Federal Reserve Chair Ben Bernanke said during a Monday interview that the central bank\u2019s delayed inflation response \u201cwas a mistake.\u201dThe Fed had dropped its benchmark interest rate to near-zero<\/p>\n","protected":false},"author":99,"featured_media":1483259,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1476786","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1476786","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/99"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1476786"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1476786\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1483259"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1476786"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1476786"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1476786"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}