The Fed should explain how it will respond to rising inflation

THE INEVITABLECPICPI has begun. America’s consumer-price index () in March was 2.6% higher than a year earlier, when prices collapsed as the pandemic struck. The increase in inflation from 1.7% in February was the biggest rise since 2009, the last time the economy was recovering from a deep shock. Several more months of high numbers—by rich-world standards—are coming. The could reach over 3.5% by May. On the separate price index used by the Federal Reserve, inflation will soon rise above the central bank’s 2% target.The Fed is rightly unworried by cosmetically higher inflation that reflects what happened a year ago. Yet the central bank does have an inflation problem that will trouble it when the economic recovery produces sustained price pressures. A new monetary-policy framework it adopted in August dictates that it should push inflation temporarily higher than its target after recessions, to make up lost ground. The problem is that nobody knows by how much or for how long it wants inflation to overshoot after the pandemic. With the risks of an inflationary episode greater than they have been in years, the ambiguity is an unfortunate additional source of uncertainty.