On Thursday’s broadcast of MSNBC’s “Morning Joe,” Steve Rattner, who served as counselor to the Treasury Secretary in the Obama administration, argued that Federal Reserve Chairman Jerome Powell got inflation wrong in part because “the White House was signaling that they thought inflation was going to come down.” And Powell “is a team player” who was up for re-appointment around a year ago.
Rattner said that Powell has “lost some credibility over inflation. He was in that whole transitory camp for a while,” but is now starting to be more realistic.
Mike Barnicle then asked, “How did Jay Powell miss it for so long?”
Rattner responded, “It’s a good question, Mike. You have to also recognize the Biden administration missed it. You have to recognize that Jay Powell was up for re-appointment about a year or so ago. And the White House was signaling that they thought inflation was going to come down. And I think Jay Powell is a team player. And I think, there are a lot of people…there are a lot of very very good economists and smart people –.”
He added that many people in both parties got inflation wrong because “we hadn’t had inflation for forty years, and all the economic models kind of had adjusted themselves almost to the point where they said it was impossible to create inflation.”
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