Why the Federal Reserve Can't Control Ever-Changing Market Prices

The column asserts that the decline of telephone-booth call costs to zero illustrates how technological progress and global labor integration drive price changes, independent of monetary policy. It emphasizes that prices constantly fluctuate due to new products, shifting consumer habits, and the entry of new global competitors. The author argues the Federal Reserve's influence is limited to the artificial federal-funds rate and money supply, which cannot counteract these deep-seated market forces.

He also rebuffs critics who fault the Fed for post-pandemic inflation, labeling their expectations of rapid fixes as unrealistic. Ultimately, the piece suggests the Fed was correct to label price movements as transitory, but its critics overlook the decades-long processes that shape the economy.