This is the Cato Daily Podcast for Thursday, June 16th, 2022.

I'm Caleb Brown.

The Federal Reserve is accelerating its interest rate hikes to combat historically high

inflation. Cato's Norbert Michelle details how the

Fed was late to the party and what its dual mandate and expanded powers following the

financial crisis might mean for Fed policy going forward.

What is the most productive thing

that we can take away from the Fed now

appearing to ramp up in taking this inflation situation dramatically more seriously.

That they're not going to wait, they're not going to let it get worse. I think you would have a bigger

problem if they had held to their previous course, rather, saying, you know, it's going to be fine, it's going to take care of itself,

we're tightening, slowly.

It was becoming obvious that inflation was getting faster, not slower.

So had they continued to wait, I think they probably would have,

we would have had an even higher chance of them

having to get even more aggressive, which of course runs a much bigger

risk of having a recession. So it's good that they're getting more aggressive.

And the Fed has indicated that they will be pursuing rate hikes on a

continuous basis. Oh yeah yeah which in fairness I think you could say they already had done.

The difference is now that they're picking up the pace,

which is an acknowledgement that what they were doing wasn't quite working the way they hoped it would,

but that's good, that they're not, that they're acknowledging that

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