The Fed is owning the inflation problem

The two most striking moments of Federal Reserve chair Jerome Powell's news conference Wednesday came at the very beginning and near the end.

He started the session by staring into the camera and telling the American people that inflation is too high and the Fed is determined to bring it down. Later, when asked a question about what other branches of government could do to fight inflation, he demurred, essentially saying inflation is the Fed's problem to solve.

Why it matters: The Fed may be late in attempting to bring down inflation, but Powell is putting the problem squarely on his own shoulders, leaving no doubt that, for better and worse, the central bank will squeeze the money supply until prices stop rising so fast.

The big picture: For most of 2021, the Fed viewed surging inflation as a temporary problem that would go away on its own. But since December, it has completed a pivot toward tighter money aimed at bringing down demand in the economy to more closely align with constricted supply.

• They were late, but they're aiming to make up for that by moving fast. In Wednesday's news conference, Powell all but pre-announced that this week's half-percentage point rate hike — the first in two decades — will be followed by at least two more.