Former Fed chair warns of stagflation crisis

The former Federal Reserve chairman warned of a coming economic morass in the next decade. Former Fed Chair Ben Bernanke warns in his new book that the United States could face simultaneous sky-high unemployment and inflation on levels not seen since the 1970s.

Bernanke, who ran the US central bank from 2006 to 2014, said he wrote his book during the Covid-19 pandemic and it provides a history of the Federal Reserve and how it responded to economic crises in the past century.

Bernanke also said he is confident that current Federal Reserve Chairman Jerome Powell, whom the Senate confirmed to serve a second term last week, can handle the troubled waters but warned about stagflation, which is when both unemployment and inflation are high.

“Even under the benign scenario, we should have a slowing economy,” he told The Times. “And inflation’s still too high but coming down. So there should be a period in the next year or two where growth is low, unemployment is at least up a little bit and inflation is still high.”