Shutdown: How Covid Shook the World's Economy

by Adam Tooze

It was hard to credit, but it seemed that finally, after decades of quiescence in the labor market, the Fed was wakening up to the implications of the historic defeat of organized labor in the 1980s and the dawning of a new era of globalization. This meant that it could afford to run the economy hot without fear of a runaway wage-price spiral. Of course, if the economy picked up steam, so too would prices, but that was nothing to fear. When asked at a press conference on January 27, 2021, whether he considered inflation a risk, Powell gave a remarkable answer. “Frankly, we welcome slightly higher inflation. . . . The kind of troubling inflation that people like me grew up with seems, seems far away and unlikely in both domestic and global context that we’ve been in for some time.”