Not Uncle Alan Greenspan's biggest fan, but he did do one thing right. In an only Nixon can go to China way, he didn't hike rates as soon as unemployment went below 6%, which is what conventional wisdom at the time told him to do.
There's no reason to fear inflation until we actually have inflation. There's much less reason to fear inflation generally, even when we have some. 2% is a stupid inflation target. But even with that, killing inflation is easy. We know that. Central bankers should know that. You hike rates, steeply if "necessary." The costs of "high" inflation (which we will never have) are minimal relative to the costs of the misery of unemployment and stagnant wages.
Still even if we think the costs of >3% inflation are too much to tolerate (they aren't, but even if we believe that), stopping inflation rather quickly is pretty much that easiest thing the Fed can do. They should know this. They do know this. I don't get it.
