After mischaracterizing the rise of inflation as “transitory” in 2021, the Federal Reserve has had its fair share of critics. Officials at the central bank were first bombarded by calls for interest rate hikes to help fight soaring consumer prices, with some economists arguing a repeat of the stagflationary 1970’s was on the way. Then, after March of last year, when Chair Jerome Powell made inflation his top priority and began one of the most aggressive interest rate hiking campaigns in history, helping inflation to peak just three months later, dovish critics began to argue that he was doing too much, and would end up sparking a recession.
Perhaps the most vocal of those doves was Starwood Capital Group co-founder and CEO Barry Sternlicht. In October 2022, Sternlicht told Fortune that Powell and his “merry band of lunatics” were destroying the economy with their hawkish policies, arguing a recession was surely on the way and the resulting job losses could lead to “social unrest.” And in March of this year, the billionaire told CNBC that Powell was using lagging data to assess inflation, which was already fading, and his rate hikes amounted to using a “steamroller” to kill a “small fly.”
