Over the centuries, an abiding tension among many major religions has been the pendulum of severity. One era will be marked by a relaxed view, where smiling clergy make liberal allowances for minor transgressions. However, this is often followed by a puritanical reaction, wherein the flock is warned that the path to salvation is an exceedingly narrow and rocky one. The Federal Reserve seems to have undergone a similar transformation in recent years. Long gone are the days of “average inflation targeting” and praise for the beneficial effects of a super-tight labor market. Inflation is now the eternal and infernal enemy and the Fed will yield no quarter in battling it.
