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Historical past, Federal Reserve Chairman Jerome Powell stated final week in Jackson Gap, Wyo., warns in opposition to “prematurely loosening” Fed coverage. Has he realized one thing from Arthur Burns? Burns, who led the Fed from 1970 to 1978, tightened credit score to combat inflation early within the Seventies, however then did not comply with by way of. That contributed to the Nice Inflation.
Burns, a revered economist who had been president of the Nationwide Bureau of Financial Analysis, had impeccable anti-inflation credentials when President Richard Nixon appointed him. He taught Milton Friedman when Friedman was an undergraduate at Rutgers College and skilled future Fed Chairman Alan Greenspan, who did graduate work at Columbia. However Burns finally admitted that he did not rein within the inflationary pressures when he had the chance to take action.
