Is there any way the Fed can better insulate itself from such pressures in the future? I do fault the Fed for not taking seriously in 2019 the idea of a deep negative interest-rate policy as a way of cushioning against deflation. To be fair, the economics profession has badly lagged in that regard as well. Much of the intellectual resistance to deeply negative interest rates is curiously superficial and needs to be addressed the next time the Fed reviews its monetary framework.
If the Fed had a more powerful tool for fighting deflation, it would likely have been braver about raising interest rates sooner as inflation picked up. The full effect of monetary policy on inflation typically takes a few quarters to appear, and the Fed needs the confidence to be more agile.
In sum, the Fed certainly bears its share of blame for the great inflation of the 2020s. But powerful political pressures from the left and overly-optimistic analyses of open-ended debt policy, not to mention genuine uncertainties about inflation and real interest rates, also played a very large role.
Kenneth Rogoff, professor of economics and public policy at Harvard University and recipient of the 2011 Deutsche Bank Prize in Financial Economics, was the chief economist of the International Monetary Fund from 2001 to 2003. The co-author of "This Time is Different: Eight Centuries of Financial Folly," his new book, "The Curse of Cash," was released in August 2016.