Constitution Avenue heresy

One of the US Federal Reserve’s prime jobs is to maintain price stability. So it seems heretical to suggest Ben Bernanke might be willing to countenance a bit of inflation. But he is also the steward of the US banking system, and, to some extent, the economy. While inflation leads to an unfair distribution of rewards and pain, and is both economically destructive and hard to eradicate, the Fed may decide to tolerate some degree of price rises, if they help pull the housing market – and by extens...