The Fed has more than a ‘credibility’ problem

ECONOMY: April 13, 2023

I have heard some people say that the Federal Reserve has a credibility problem. The agency missed the biggest inflation spike since the 1980s, was slow to start rolling back pandemic policies and failed to spot the risks that some banks, such as Silicon Valley Bank (SVB), were facing. Instead of instilling confidence and stability, the Fed’s policy communication has at times been so unclear and confused that it has only served to exacerbate market volatility.