It's been a baptism of fire for the new Fed chair

Washington

JAY POWELL, the newly appointed chair of the US Federal Reserve, must be having second thoughts about having accepted the job. After just a few days in charge, bond and stock markets are informing him of the monumental monetary policy problems that lie ahead.

The spike in US long-term interest rates is alerting him to the inflation risk that might result from an overheated US economy. The volatility in stock markets seems to highlight the possibility that too rapid an increase in interest rates could lead to the disorderly bursting of the global asset bubble. That, in turn, could bring on another US and global recession.