Powell On Unanticipated Inflation and Whether Stimulus Was Mistaken

Q: If the inflation in the pandemic was not the inflation the Fed had anticipated when crafting the framework, does that mean the stimulus was mistaken?

• A: There's a sense among some that you wanted inflation, this is what you wanted, how do you like it? And the truth is, this is not the inflation that what we were talking about in the framework. That was inflation that comes from a tight labor market so we had 3.5% unemployment for a period and inflation barely getting to 2% and our thinking was, we can afford to wait to raise rates until we see actual inflation rather than preemptive.
• There is something completely different now. That's a situation where you had a very, very high level of employment and low inflation. This is literally the opposite, where we've had very high inflation since the labor market was in terrible shape. "People will judge in 25 years whether we overdid it or not, but the reality is, we are where we are, and we think our policy is the right one for the situation that we're in."