Monday, former Federal Reserve chairman Ben Bernanke called it a “mistake” for the current Federal Reserve to take a delayed approach to respond to inflation.
The former Fed chairman made those comments during an appearance on CNBC’s “Squawk Box.
“The question is why did they delay that,” he said. “Why did they delay their response? I think in retrospect, yes, it was a mistake.”
Bernanke speculated current Federal Reserve chairman Jay Powell was slow to act as not to “shock” the market. However, according to Bernanke, it has proved to be a late response.
“One of the reasons was that they wanted not to shock the market,” Bernanke added. “Jay 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’t respond more quickly to the inflationary pressure in the middle of 2021.”
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