That should help other Safari users.

Thanks. A clarification: the labor situation is not actually a *demand* issue, it’s a *supply* issue: in 2020 and 2021 more people left the job market for good, and more changed from full-time to part-time/contract work, than is normal for a year. Those changes are permanent, not reverting to the mean. Consequently, for the first time in decades, employers have had to increase pay to attract workers. Those changes are permanent as well – but apart from re-shoring, which is not a major factor, there are few underlying reasons for *further* increases. Therefore, pure jawboning from the Fed should be sufficient to push back against that source of inflation.

Thanks for pointing that out. As you know, I have long argued that the Fed left rates too low for too long post-pandemic and needed to normalize earlier. The last normalization process was cut short prematurely in 2019, and the pandemic quickly made normalization a distant memory. With rates back to zero and the balance sheet blowing the roof off the house, the Fed became overly focused on getting unemployment as low as possible even as the unemployment rate quickly sank to historic lows. The Fed thought it had deflation on its side and plenty of time.

It is oh so ironic that the concern has flipped 180 degrees to an overheated labor market. Be careful what you wish for applies bigtime here.

Despite rhetoric, I think those two things are what’s really driving the Fed’s policy, not current measures of inflation per se.

Blinder is missing the fact that because the market looks forward, it reacts (over-reacts, initially) to signalling and jawboning.