With inflation rising, unemployment falling and wages soaring last year, Powell's Fed waited too long to reverse its ultra-loose monetary policy. Recently, a number of "veteran leaders of the Federal Reserve" have said one after another that the action is too late and the recession is almost a foregone conclusion. The latest to join the bearish camp is former Federal Reserve Chairman Ben Bernanke.

In his latest acceptance of the CNBC dialogue, Bernanke called the delay in Fed action a "mistake".'in retrospect, yes, it was a mistake, 'Mr. Bernanke said. Inflation has become one of the most serious threats to the economy. "I think they [the Fed] agree that this is a mistake."

Bernanke pointed out that the question is why they delayed, why delayed the response, missed the time window to tighten monetary policy, which is a complicated matter.'one reason is that they don't want to hit the market, 'Mr. Bernanke said.

Powell was also on the Fed board when he cut back on QE in 2013. It was a very unpleasant experience. Powell wants to avoid this by issuing as many warnings as possible. So gradualism is one of several reasons why the Fed did not respond more quickly to inflationary pressures in mid-2021.

In the late summer of 2020, the Fed changed its policy framework to indicate that it would allow higher-than-normal inflation to ensure a comprehensive and inclusive employment recovery. When inflation began to rise above its 2 per cent target in the spring of 2021, the Fed said it expected high inflation to be "temporary" because factors associated with the epidemic would weaken.

Recently, several Fed officials defended themselves, saying that when inflation was more persistent, they began to use "forward guidance" to tell the market that tighter policies were imminent.

Bernanke saidAlthough current inflation is often compared with the hyperinflation of the late 1970s and early 1980s, it is different from the last high inflation.More importantly, the Fed currently has more credibility as an inflation fighter and higher public support for raising interest rates. "while we have seen the impact of Fed tightening on the market, there is a lot of support for the Fed's current policy. We will see the impact of housing prices and other aspects. These are some aspects of the current situation that are better than those of the 1970s. We learned a lot from the 1970s. "

In recent days, former veteran leaders of the Federal Reserve have repeatedly said that the Fed is too late to act. William Dudley, chairman of the New York Fed from 2009 to 2018, said Fed officials had little chance of a soft landing in the current cycle because every time they had to push up unemployment in the past, they ended in recession.

Jeffrey Lacker, chairman of the Richmond Fed from 2004 to 2017, and Charles Plosser, chairman of the Philadelphia Fed from 2006 to 2015, have similar views.

All three former Fed officials agree that the Fed is likely to need to raise interest rates to levels not seen in years. They also agreed that the disaster had been laid for the current situation when the Fed announced that it would not take action to curb inflation in 2020.

Because the Fed thought inflation was temporary and did not tighten policy last summer, the Fed lagged far behind the curve, forcing it to raise interest rates aggressively.

Financial blog Zerohedge commented that under the Taylor rule, the federal funds rate should be more than 11%, not at the current 1% or so. The Taylor rule is a formula that predicts or instructs central banks how to change interest rates in response to economic changes. The Fed under Powell missed the window of opportunity to tighten policy rates, usually with a hard landing due to policy mistakes.