WaPo calls on Fed Chair Jerome Powell to ‘go big’ on inflation after previous praise for ‘deemphasizing’ it

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The Washington Post editorial board warned Monday that if the Federal Reserve Board Chairman Jerome Powell does not take decisive action to curb inflation, he “risks losing the public’s confidence.” This comes after the board praised Powell for “deemphasizing inflation control in favor of maximizing employment” in November 2021.

The article, titled “The Federal Reserve should go big now to fight inflation,” argued that “Mr. Powell needs to adopt bold and aggressive tactics again to fight inflation.” 

“The time for steady and gradual moves from the Fed is over,” the editorial board wrote. 

MARKETS BRACE FOR 100-POINT FED RATE HIKE AS INFLATION SOARS TO NEW HIGH

WASHINGTON, DC - NOVEMBER 30: U.S. Treasury Secretary Janet Yellen (L) and Federal Reserve Board Chairman Jerome Powell (R) testify during a hearing before Senate Banking, Housing and Urban Affairs Committee on Capitol Hill November 30, 2021 in Washington, DC. (Photo by Alex Wong/Getty Images)

WASHINGTON, DC – NOVEMBER 30: U.S. Treasury Secretary Janet Yellen (L) and Federal Reserve Board Chairman Jerome Powell (R) testify during a hearing before Senate Banking, Housing and Urban Affairs Committee on Capitol Hill November 30, 2021 in Washington, DC. (Photo by Alex Wong/Getty Images)

The editorial board called for the Fed to raise interest rates by 75 basis points (0.75%) at their meeting this week. Increased interest rates are intended to make borrowing more expensive and reduce demand in the economy, hence, bringing down prices. 

The board pointed to the Labor Department’s May inflation report that was published Friday as justification for a steeper increase. 

“For the past month, top Fed officials have been signaling they will do a 50-basis-point increase, but that was before the disastrous May inflation report that came out Friday and showed large price shocks in gas, groceries, rent, airfares, cars and various services,” they wrote. 

WASHINGTON POST EDITORIAL BOARD ABSOLVES BIDEN: ‘$5 GAS IS LARGELY PUTIN’S FAULT’

U.S. President Joe Biden (C) meets with Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen, in the Oval Office at the White House on May 31, 2022 in Washington, DC. The three met to discuss the Biden Administration's plan to combat record-high inflation.

U.S. President Joe Biden (C) meets with Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen, in the Oval Office at the White House on May 31, 2022 in Washington, DC. The three met to discuss the Biden Administration’s plan to combat record-high inflation. (Photo by Kevin Dietsch/Getty Images)

The editorial board noted that “polls show Americans expect high inflation to stick around. The Fed needs to take decisive action — the sooner, the better. Otherwise, Mr. Powell risks losing the public’s confidence.”

The board previously endorsed Powell for a second term as Fed chairman in November 2021, and encouraged Biden to renominate him. 

At the time, they praised Powell, writing, “Mr. Powell has done an admirable job guiding monetary policy through the covid-19 downturn, and he has rebalanced the central bank’s focus, deemphasizing inflation control in favor of maximizing employment, all while spurring remarkably little controversy.” 

US Federal Reserve Chairman Jerome Powell testifies before the House Oversight And Government Reform Committee hearings on oversight of the Treasury Department's and Federal Reserve's Pandemic Response, on Capitol Hill in Washington, DC, September 30, 2021. (Photo by AL DRAGO/AFP via Getty Images)

US Federal Reserve Chairman Jerome Powell testifies before the House Oversight And Government Reform Committee hearings on oversight of the Treasury Department’s and Federal Reserve’s Pandemic Response, on Capitol Hill in Washington, DC, September 30, 2021. (Photo by AL DRAGO/AFP via Getty Images)

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They were so enthusiastic about Powell’s candidacy that they titled the article, “What is Biden waiting for? Renominate Jerome Powell already.” They said Powell “deserves another term”. 

Inflation is at a 40-year-high. The Federal Reserve’s actions to stimulate the economy in response to the COVID-19 pandemic included $120 billion in monthly asset purchases and cutting interest rates. Both of these policies contributed to inflation.