Fed's Waller promises to tackle inflation, says mistakes of the '70s won't be repeated

cnbc.com:

Federal Reserve Governor Christopher Waller pledged Tuesday that the rate-setting group wouldn't make the same mistakes on inflation that it did in the 1970s.

Back then, he said during a panel chat with Minneapolis Fed President Neel Kashkari, the central bank talked tough on inflation but wilted every time tighter monetary policy caused an uptick in unemployment.

This time, Waller said he and and his colleagues will follow through on its intentions to raise interest rates until inflation comes down down to the Fed's targeted level. The central abnk has raised rates twice this year, including a half percentage point move last week.

«We know what happened for the Fed not taking the job seriously on inflation in the 1970s, and we ain't gonna let that happen,» Waller said.

The remarks came with inflation running at its hottest pace in more than 40 years. Earlier in the day, President Joe Biden called inflation the economy's biggest challenge now and noted fighting price increases «starts with the Federal Reserve.»

Though he noted the central bank's political independence, Biden said, «The Fed should do its job, and it will do its job. I'm convinced of that in my mind.»

While Waller drew the comparison to the Fed of the 1970s and early '80s, which eventually defeated inflation with a series of massive interest rate hikes when Chairman Paul Volcker took over, he said he doesn't think the current policymakers need to be as aggressive.

«They had zero credibility, so Volcker just basically said, 'I've got to just do this shock and awe,'» Waller said. «We don't have that problem right now. This is not a shock-and-awe Volcker moment.»

The Volcker moves took the Fed's benchmark interest rate to close to 20% and sent the economy