Democrats are wrong. The Federal Reserve cannot pause in its fight against inflation. In August, Federal Reserve Chairman Jerome Powell observed that “without price stability, the economy does not work for anyone. Without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all.” Powell also stated clearly that a “sustained period of below-trend growth” and economic pain would be necessary to restore price stability.

The Federal Reserve remains behind the curve on restoring price stability, defined as 2% inflation over the course of an economic cycle. Price stability is important because people and businesses do not have to worry about high inflation when making decisions about consumption, saving, or investing. The economy runs efficiently, and scarce capital is allocated appropriately when prices are stable. Everyone benefits from price stability.