Monetary policy is responsible for inflation although it was not obvious in the 1970s

See Powell’s Opinions on Inflation Matter, Not Biden’s: Unlike the 1970s, today’s Fed accepts responsibility for inflation, and the White House backs it up by Greg Ip. Excerpts:

"That monetary policy is responsible for inflation should seem obvious, but back then, it wasn’t, as Ben Bernanke, a monetary scholar who chaired the Fed from 2006 to 2014 shows in his new book, “21st Century Monetary Policy: The Federal Reserve from the Great Inflation to Covid-19.”

At the time many Keynesians, the dominant school of macroeconomists, thought U.S. society had become more prone to inflation. Crucially, these views were shared by Arthur Burns, appointed Fed chair by Richard Nixon in 1970, Mr. Bernanke writes.

“This greater tendency to inflation, in Burns’s view, reflected the growing ability of large corporations and labor unions to insulate themselves from market forces, a power they used to push up prices and wages at will,” Mr. Bernanke writes. Because Burns viewed inflation as driven more by rising costs than excess demand, he saw tight monetary policy “as a costly and inefficient way to bring down inflation…. He did not think that the public would tolerate unemployment high enough to fully control inflation using monetary policy alone, or that it was the Fed’s place to make that decision.”"

"Burns persuaded Nixon to implement wage and price controls as an alternative to tight monetary policy."

"Mr. Powell’s admission of error is far more significant. Last month he told the Journal: “In hindsight…it probably would’ve been better to have raised rates earlier.”"

"It is reminiscent of the 1970s when Mr. Powell blames disruptions to supply, which are beyond the Fed’s reach, for much of the rise in inflation. But whereas Burns thought that absolved the Fed of responsibility, Mr. Powell doesn’t: Whatever the economy can supply, he says the Fed must calibrate demand to that."

"Mr. Powell was asked at a news conference recently if fiscal policy, blamed for pushing inflation up, had a role in bringing it down. Mr. Powell replied: “It’s really the Fed that has responsibility for price stability. Whatever arrives in terms of fiscal activity, we take it as a given.”

This doesn’t mean Mr. Biden bears no responsibility and has no role to play. His stimulus probably did contribute to the rise in inflation, although only a small part. Core inflation, which excludes food and energy, has risen roughly 3 percentage points in Canada, Britain and the eurozone relative to prepandemic levels, compared with 4 points in the U.S." 

"it is worth remembering why Burns failed. He did raise rates, but never by high or long enough to keep inflation down. Mr. Bernanke writes how Mr. Volcker, upon taking office, criticized his predecessors for worrying “at critical junctures” more about “weakness in economic activity or other objectives” than inflation."