The timing could not have been worse, though in the grand scheme of things it is just perfect. It was barely two weeks ago when Jay Powell was announcing what he and others were claiming was a huge, massive deal. No longer a specific inflation target, but one that would be averaged high against low. The Federal Reserve had been unable to achieve its inflation goal for such a long time officials could no longer use their favorite word, so they wanted you to know they were going to do something big in response.
For years, that word was “transitory.” Whenever the CPI or PCE Deflator would inevitably come up short, Ben Bernanke and especially Janet Yellen would declare the shortfall nothing more than a product of temporary factors. By their very nature, temporary factors dissipate leaving the way opened for monetary policy to eventually succeed.
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