Janet Yellen is on the lecture circuit. (Reuters)
"The 1970s were a horrible period. If there's one thing that has to be very high priority, we don't want to go back to a period that is anything like that," she said, critiquing presentations on the economy at a symposium for college students in Tacoma, Washington.
She is, of course, talking about inflation (not bell-bottoms or disco).
"During the 1970s the Fed failed to keep inflation low in the face of supply shocks (which) became incorporated into inflation expectations," Yellen said.
She acknowledges, as I think most of us do, that this is not a simple problem with a simple answer. She's worried about the prospects of lower growth as well. But the fact that she, as one of the more dove-ish members of the committee, is talking about inflation risks is a sign that the tide may have turned.
Nice to see you commenting again.
I have long held that the inflation of the 1970s begin when we did not have a recession in 1967.
If we avoid a recession this time around are we setting up an inflation problem, not immediately, but a few years down the road?