Inflation makes humbled central bankers scale back their ambitions

The first step for the newly humbled monetary policymakers is getting prices back under control without creating economic havoc

Once seen as the world’s go-to ­economic crisis fighters, central bankers are now desperately trying to contain a problem they allowed to happen: inflation. That’s eroded their credibility in the eyes of investors and society at large.
 

Officials have offered mea culpas. US Federal Reserve Chair Jerome Powell acknowledged in June that “with the benefit of hindsight, clearly we did” underestimate inflation. Christine Lagarde, his counterpart at the European Central Bank, has made similar concessions, and Reserve Bank of Australia Governor Philip Lowe said in May that his team’s forecasts had been “embarrassing.” In October, South African Reserve Bank Governor