In Brief: The Fed's Inflation Fight (with Greg Ip)
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Why the Fed Reserve Needs Discipline
Inflation is a really noisy number. It would be foolish to raise interest rates to deal with an inflation problem that we know is going to disappear in just a month or two. At every moment they make their decision, they say, are we getting the trade off right between employment and inflation? The fedshir has a lot of independence, but it's not absolute. There are other factors also that constrain what the fed chairman can do.
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