I do agree that the Fed has the tools it needs to fight inflation. However, employing them at the right time would be tricky. Tightening policy too fast would prolong the recession (and some say would create something like Japan's lost decade). Tightening policy too slow would risk high inflation. Moreover, it takes some time for the Fed to see the effects of its policy changes, making it more challenging.
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I do agree that the Fed has the tools it needs to fight inflation. However, employing them at the right time would be tricky. Tightening policy too fast would prolong the recession (and some say would create something like Japan's lost decade). Tightening policy too slow would risk high inflation. Moreover, it takes some time for the Fed to see the effects of its policy changes, making it more challenging.
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