Reams of paper have been filled explaining how and why the “Great Inflation” took root but, in all of the analysis, too-easy monetary policy figures prominently. Current Fed chair Jay Powell witnessed the cost of the Volcker disinflation and has already started to tighten policy meaningfully. To be sure, Powell will need skill, resolve and not a little luck, but — in stark comparison with Volcker’s predecessor, G William Miller — he knows what happens if high inflation is left unattended.

But even if I am right that we are not living a rerun of the 1970s, the path ahead is not rosy. Inflation is undeniably very high, and a large portion of it is in core services, driven by an economy that is trying to buy far more than can be comfortably produced.

Any empirical estimates of how much slack must be engendered in the economy to bring down structural inflation present a very unpleasant trade-off. Either the Fed can bring inflation down quickly by causing a meaningful recession, though likely one that is milder than in 1979, or it can slow the economy to just shy of a recession, but live with elevated inflation for the next few years. Judging from the forecasts the members of the Federal Open Market Committee made at their most recent meeting, they have chosen the latter path. But, as I noted, luck will play a role as well.