Top Federal Reserve officials say they misread inflation and now plan to correct the course

Top Federal Reserve officials say they misread inflation and now plan to correct the course

Top officials at the Federal Reserve were seeing inflation data come in very hot for months before policymakers moved to wind down monetary policies that were stimulating the economy. A chorus of analysts, economists and former policymakers have chimed in, saying that was a mistake. "The forward guidance, overall, slowed the response to the Fed to the inflation problem" former Federal Reserve Chair Ben Bernanke told CNBC. Treasury Secretary Janet Yellen also acknowledged the misdiagnosis coming from her own department, and that of current Fed Chair Jerome Powell. "Both of us could have probably used a better word than 'transitory,'" she told senators in June when asked about their remarks about inflation last year and their slow response to price pressures. It's the Fed's task to tame inflation that is running at a pace not seen in four decades. To do so, it has been hiking interest rates at a fast pace. Reining in inflation may take more aggressive monetary policy moves than the central bank has embraced in recent years, according to economists like Judd Cramer. indicates that the Fed may need to hike rates to levels not seen in decades to force rising prices into retreat. "If inflation