Part 3/12:
Initial Optimism: When quantitative easing (money printing) began, both the Fed and other authorities claimed it wouldn't cause inflation.
Inflation Emerges: Despite assurances, inflation rose, leading policymakers to label it as transitory. When it persisted, admissions changed; inflation was acknowledged as more persistent but still manageable.
Interest Rate Hikes: The Fed initially suggested modest increases, like 0.25%, but later shifted towards more aggressive hikes, recognizing that inflation requires a more forceful response.
Acknowledgment of Economic Pain: In 2023, the Fed explicitly states that their efforts might cause economic discomfort, marking a significant change from earlier declarations where economic pain was dismissed as unlikely.