To understand the Fed’s thinking, it helps to get inside the mind of its chairman, Jay Powell.
In his role as the central bank chief, he’s made no secret of his admiration for Paul Volcker, whose name is practically synonymous with fighting inflation at all costs, even if it crashes the economy into a recession, as Volcker’s Fed did — twice — in the early 1980s.
Powell, in his now notoriously blunt Jackson Hole speech last month, appeared to fully embody his predecessor when he declared that “we must keep at it until the job is done” — (“it,” being rate hikes and “the job” being tamping down inflation.) That was an explicit reference, whether he intended it or not, to the ideology of Volcker, whose 2018 autobiography is titled “Keeping At It.”
During congressional testimony in the spring, Powell said of his hero: “I think he was one of