Tightening money too much and too fast would unnecessarily boost unemployment and could even cause a recession. We’re now at a point where it’s a risk worth taking, I argue at Bloomberg Opinion:
The costs of a relatively quick restoration of monetary stability thus look low. Putting off that restoration, on the other hand, risks letting [inflation] expectations drift upward. We’re not in 1981, having to choose between continued high inflation and a severe recession. We’re in 1968, deciding whether to halt inflation in its early stages so that we never reach 1981.