The modern world is different from that of the 1970s, which was characterized by high inflation rates, and for this reason, the US Federal Reserve remains ready to face the pressures of rising prices.
This is stated by Kathryn Mann of the Bank of England, who until recently was the chief economist of Citigroup Inc.
“History is a valuable guide,” he told a video conference at the Australian National University, answering a question about the similarities between the 1970s and today, and whether the Fed should “answer” the latter. increase in inflation to 5.4%.
“We must always pay attention to the historical facts. However, I think that we should also pay attention to some historical institutional changes “.
Fed Chairman Jerome Powell says the recent rise in inflation reflects the problems associated with the opening of the US economy after the pandemic and that they are expected to be temporary.
Last month he appeared cautious about employment levels and did not give a clear timetable for the gradual reduction of the $ 120 billion-a-month bond-buying program.
On Friday, wages outside the agricultural sector in August were lower than expected, prompting economists to predict that there will be no decision on a tapering reduction in the bond market this month.