Over his first term in office, Jerome Powell became arguably the most dovish chairman in the Federal Reserve’s modern history, giving priority to full employment in an era in which inflation seemed extinct. In his second term he may have to execute the reverse: giving priority to inflation at the risk of sacrificing jobs.

The pivot could be painful for both Mr. Powell and President Biden. The White House praised Mr. Powell on Monday for sharing “the administration’s focus on ensuring that economic growth broadly benefits all workers.” Yet economic conditions have been substantially reordered in just the past year. Inflation, at 6.2%, is its highest in 31 years. While employment remains 4.2 million below its pre-pandemic peak, labor shortages are widespread and wage growth is accelerating. All that threatens the Fed’s 2% inflation target.

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