Bernanke: Fed’s ‘credibility’ means we are ‘almost certainly not’ in danger of repeating 1970s inflation

The article, titled “Inflation Isn’t Going to Bring Back the 1970s”, contended that while “it’s true there are some similarities” between the 1970s and today, “there are critical differences as well.” 

Regarding these differences, Bernanke argued that in the 1960s and 1970s, the Federal Reserve was met with stiff political resistance to raising interest rates. 

“First, although inflation was very unpopular in the ’60s and ’70s, as it (understandably) is today, back then, any inclination by the Federal Reserve to fight inflation by raising interest rates, which could also slow the economy and raise unemployment, met stiff political resistance,” he wrote. 

INFLATION ‘POLICY ERRORS OF THE 1970s ECHO IN OUR TIMES’, FINANCIAL TIMES COLUMNIST WARNS

 In this May 10, 2013 file photo, Federal Reserve Chairman Ben Bernanke waves goodbye after speaking during a banking conference in Chicago. (AP Photo/Paul Beaty, File)

 In this May 10, 2013 file photo, Federal Reserve Chairman Ben Bernanke waves goodbye after speaking during a banking conference in Chicago. (AP Photo/Paul Beaty, File)

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