Salient to Investors:

Paul Volcker said:

  • The Fed will fall short by being asked to meet price stability and full employment – a mandate both operationally confusing and ultimately illusory.
  • Asking too much is accommodating misguided fiscal policies, dealing with structural imbalances, to square continuously the hypothetical circles of stability, growth and full employment – efforts that cause the Fed to lose sight of its basic responsibility for price stability and a stable currency.
  • Credibility must not be frittered away by yielding to the notion that a little inflation right now is a good thing to release animal spirits and pep up investment.
  • Inflation cannot be manipulated to reach economic objectives, and when fairly and deliberately started is hard to control and reverse.


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