No ‘Pat on the Back’ for the Federal Reserve

null Jan. 2, 2024 3:16 pm ETThe Federal Reserve building in Washington, Oct. 19, 2022. Photo: GRAEME SLOAN/SIPA PRESS/ASSOCIATED PRESSI strongly disagree with John Cochrane’s op-ed “The Federal Reserve Deserves a Pat on the Back” (Dec. 27). Recent disinflation doesn’t excuse the central bank’s hyperinflationary monetary expansion that followed the onset of the Covid pandemic.From March 2020 to March 2022, the M2 money supply (currency plus bank deposits) increased by 40%, exceeding any other two-year period since 1871. Well into 2022, when the economy was recovering rapidly, Fed Chairman Jerome Powell continued aggressive monetary easing, buying mortgage-backed securities amid one of the biggest housing booms in U.S. history. He called the inflation “temporary” and claimed the soaring money supply had no relation to accelerating prices.Copyright ©2024 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8Sponsored OffersTurboTax: Up to 10% off online tax servi

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No ‘Pat on the Back’ for the Federal Reserve

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Jan. 2, 2024 3:16 pm ET

The Federal Reserve building in Washington, Oct. 19, 2022. Photo: GRAEME SLOAN/SIPA PRESS/ASSOCIATED PRESS

I strongly disagree with John Cochrane’s op-ed “The Federal Reserve Deserves a Pat on the Back” (Dec. 27). Recent disinflation doesn’t excuse the central bank’s hyperinflationary monetary expansion that followed the onset of the Covid pandemic.

From March 2020 to March 2022, the M2 money supply (currency plus bank deposits) increased by 40%, exceeding any other two-year period since 1871. Well into 2022, when the economy was recovering rapidly, Fed Chairman Jerome Powell continued aggressive monetary easing, buying mortgage-backed securities amid one of the biggest housing booms in U.S. history. He called the inflation “temporary” and claimed the soaring money supply had no relation to accelerating prices.