Cohn, who is in frequent contact with CEOs, told CNN that companies have been experiencing wage inflation and rising input costs for more than a year.
“I think the business community is disappointed that the Fed has taken so long to figure out what the business community has seen,” he said.
“They were late,” said Cohn, who served as director of the National Economic Council from 2017 to 2018.
Fed officials initially dismissed inflation last year as “transient,” before finally acknowledging a more persistent and pervasive problem.
“The business world has had real inflation for a long time,” said Cohn, who was a senior Goldman Sachs executive before joining the Trump White House. “And I don’t think the business world ever thought it was transitory. I think they thought it was real. And they didn’t think it was going away anytime soon.”
When asked if Chairman Jerome Powell was still the right person to lead the Fed, Cohn offered little support.
“Look, he’s the chairman of the Fed,” said Cohn, who in 2017 was himself a candidate for the job before Trump brought in Powell. “He does his job. You could say you disagree with what he did. I disagree with what he did. I think they were late and that they raised the rates. But he’s the president.”
Cohn noted that Powell is not the first Fed chairman to be criticized for keeping rates too low for too long or not cutting them fast enough.
“We clearly had inflationary pressures last year before the war, but the war in Ukraine clearly accelerated them,” Cohn said.
“If you replay last summer, we had a real spike in inflation that started in March, April, May, June of last year, and then inflation went down month after month after month…until ‘at the end of the summer,’ he said. said. “So we were worried because we saw inflation spread more widely and because we didn’t see the supply chain issues improving… We had real concerns.”
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