framework they adopted was made for the world of yesterday, not the world of today. The world of yesterday was insufficient demand. The world of today is insufficient supply. The mistake number one is adopting a framework change at the wrong time that told the markets that they would be looking backwards, not forward in trying to contain inflation. Step number two, which was a much more obvious mistake, and many of us have warned against it, is that as early as March of last year, they decided to characterize the higher inflation as transitory, and they did not, quote, retire that characterization until the end of November when there was ample evidence, both from the companies and from the economic data, that inflation was not transitory. Mistake number three is what's happening today. By not moving early enough, they're going to be forced into a very hard pivot. They will bunch three sets of contractionary measures, and the risk is that this economy could not navigate through these (5/43)
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