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The Editors

The Fed Shouldn’t Rule Out Faster Tightening

If inflation keeps refusing to cooperate, the central bank will have to be more forceful.

Never say never.

Never say never.

Photographer: Win McNamee/Getty Images

Prices rose in the U.S. by 8.3% in the year to April, only a little less than the increase of 8.5% in the year to March. Most economists had expected a bigger decline. Inflation, it seems, might have peaked, but the vital question is how quickly it will fall back to an acceptable level. At the moment, the answer appears to be: not quickly enough.

Last week, the Federal Reserve raised its policy interest rate by 50 basis points, to a range of 0.75% to 1%, and said to expect more. But the schedule it’s led investors to anticipate would leave rates substantially negative in real terms for many months yet. Despite the risk that faster-than-expected tightening might tip the economy into recession, the central bank needs to weigh the case for firmer action and prepare investors for the possibility. President Joe Biden’s administration, for its part, ought to start helping rather than making things harder.