Though overall inflation has steadily dropped, the mixed economic picture has in some ways left Powell in a tougher position than he faced in Jackson Hole last year, when he delivered a blunt warning about the Fed’s plans to keep rapidly raising rates to fight inflation.
” likely in the form of job losses and potentially a recession. Raghuram Rajan, an economist at the University of Chicago and a former head of India’s central bank, suggested that if Powell is tempted this year to swing the other way and predict a “painless disinflation,” he should avoid doing so. In an interview this week, Raphael Bostic, president of the Federal Reserve’s Atlanta branch, said he favors keeping the Fed’s key rate at its current level at least well into next year. In June, when the 18 members of the Fed’s rate-setting committee last issued their quarterly projections, they predicted that they would raise rates once more this year.