With inflation at a 41-year high and showing no signs of slowing down any time soon, chairman of the Federal Reserve Jerome Powell has been reluctant to warn Americans that it may be necessary to plunge the nation into recession in order to curb rising prices.
Inflation rose more than expected in May, leaving Powell to decide whether or not the Fed should push tougher monetary policy to get things back on track.
As Bloomberg points out, Powell, once "sounding a bit like the inflation-tolerant, former central bank chief Arthur Burns," has now, "taken on the mantle of inflation-slayer -- and Fed icon -- Paul Volcker."
Powell has hinted at the fact there may be an imminent recession, but has not used the "r-word" outright, given the images it conjures up for regular Americans.
Bloomberg analysts have predicted that the chances of a recession in 2022 are one in four, but raised the probability to three in four for 2023, saying a recession will be "hard to avoid" then.
The Fed had originally planned on bringing inflation down to 2 percent, however as prices continue to rise by every available metric, that has been raised to 3 percent.
Not everybody thinks the Fed should compromise on its original goal, however, including Deutsche Bank economist Peter Hooper who said to do so would be a "Burnsian mistake," referencing the former Fed chair who in the 1970s let inflated prices simply become a part of the economy before Volcker swooped in and corrected things using tough monetary policy.
Powell is set to speak with reporters on Wednesday following an expected interest rate hike by the Fed, where, according to Bloomberg, he will likely take on a more Volcker-esque stance on the matter at hand.