We woke the beast, and now we may have to learn to live with it. After more than 20 years of low, stable inflation, it's come roaring back — at more than 9% — and it may never return to pre-pandemic levels. We've already lost the benefits of our former economy: low interest rates and pay raises that actually make you richer. Now we also have to manage a new risk in our lives, the beast we thought we had tamed.
The pandemic changed many things, and it's forced me to give up, reluctantly, my long-held belief that inflation is something we know how to control; that policy makers can pick an inflation number, maintain it, and all will be well; that Americans will always know what our dollars are worth.
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Allison Schrager is a senior fellow at the Manhattan Institute and a contributing editor of City Journal.
This piece originally appeared in Bloomberg