The Fed doesn't have to worry about high inflation anymore, and that's a problem

Williamson issuing two papers suggesting that QE had limited or no benefits.Current Fed Chairman Jerome Powell also has questioned QE's effectiveness in the past, and told Washington lawmakers last week that he wants the Fed to get better at the inflation issue.Specifically, Powell said in response to a question from Sen. Pat Toomey, R-Pa., that he wants to "make that 2 percent inflation target credible, so that inflation kind of averages around 2 percent, rather than only averaging 2 percent in good times and then averaging way less than that in bad times, which would drag expectations down.""No decisions have been made," the chair added. Others might say they have no credibility because they can't get the inflation they want."Moreover, LaVorgna thinks the Fed gets too much credit — or blame, as it were — for low inflation.Other factors, particularly inherently disinflationary technological advancements, and the continuing trend toward globalization, have conspired to keep inflation low, he said.On a policy level, this creates several issues for the Fed.For one thing, it's making it harder for Powell and his fellow central bankers to justify further interest rate hikes, especially with U.S. and global GDP easing back from a strong 2018.