Federal Reserve policy in the wake of the COVID pandemic has been widelycriticized as responding too slowly to surging inflation and an overheated labormarket, thereby exacerbating the inflation problem and impairing macroeconomicperformance more generally. This paper challenges this view by exploring thelikely effects of a markedly more restrictive counterfactual monetary policystarting in early 2021. Under this policy, the Federal Open Market Committee(FOMC) would have strictly follow
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