In the aftermath of an economic and financial challenge that Federal Reserve Chairman Jerome Powell recently likened to Dunkirkthe urgent rescue of British and other Allied troops from France in World War IItheres a remarkable uniformity of opinion on the Federal Reserve Board of Governors. Apparently, they all agree on the appropriateness of the Feds monetary-policy decisions. Thats what worries me.
While it might seem reassuring when members of an institution concur, the Feds tendency toward groupthink carries the risk of missing other important perspectives. Forging a consensus can mean trimming the edges of troubling concerns over future developments.
For example, even as financial markets signal uneasiness about the effect of inflationary pressures, Mr. Powell has maintained steadfastly that the Fed will be patient in keeping interest rates near zero through 2023. He also promises the central bank will continue purchasing at least $120 billion of Treasury bonds and mortgage-backed securities every month (adding $1.44 trillion annually to the Feds balance sheet) until weve made substantial further progress toward our goals.