An ex-chairman of the Federal Reserve Ben BernankeThe central bank made a mistake in not addressing an inflation problem which has now become the most severe since the 1980s.

Bernanke led the Fed through the 2008 financial crisis. He also presided over unprecedented expansion of monetary policy. CNBC interviewed Bernanke about the “complicated” issue of whether action needed to control inflation.

“The real question is, why didn’t they do it sooner. What made them delay responding? “I think it was a mistake, in retrospect,” he said to CNBC. Andrew Ross SorkinIn an interview that was broadcast during Monday’s edition of “Squawk Box” show. “And they agreed it was a mistake.”

Similar to the Bernanke Fed the Jerome PowellThe Covid pandemic in March 2020 erupted and the central bank that was headed by it was called upon to respond. Many of the actions were modeled after financial crisis responses, but in a much larger scale.

After the economic crisis, it maintained the historically loose policy.

The Fed has now become tightening policy with rate hikesA reduction in the Fed’s bond holdings which will be implemented starting June. But, critics are pointing out that the Fed waited too long before pulling back. Now there is inflation running at an 8.3% annual pace.

Bernanke indicated that he fully understands the reason why Powell Fed delayed.

He said that one reason was because they didn’t want to shock the markets. Jay Powell was on the Taper Tantrum board, which was very painful. This was to help avoid such things by providing as much information as possible. The Fed failed to respond quickly enough to rising inflation in 2021 because of gradualism.

The Fed modified its policy framework in late summer 2020 to allow for inflation to rise faster than usual to ensure a full and inclusive recovery of the economy.

Inflation rose above the Fed’s target of 2% in spring 2021. Fed officials stated that they believed it would be temporary due to the presence of pandemic-specific risk factors. Recently, Fed officials have been defending their position, explaining that as inflation became more persistent they used “forward guidance” (to inform the market about tighter policies).

Bernanke stated that although the Fed is drawing parallels to hyperinflation during the 1980s and 1990s, this current run of inflation is still different than the last time these price rises were so high.

First, there is greater credibility of the Fed as an inflation fighter. Second, rate rises are supported by more people.

Bernanke stated that there is a lot support for tightening the Fed now even though we can see the market effects. We’ll be seeing the effect on house prices and other indicators. These are some of the ways that I feel the current state is better, because there were many lessons learned from the ’70s.

Bernanke will release his new book “21st Century Monetary Policy, The Federal Reserve from Great Inflation and COVID-19” on Tuesday.