When Federal Reserve Chair Jerome Powell delivers a keynote speech at a central bank research symposium hosted by the Kansas City Fed here on Friday, that copacetic backdrop may inspire a message shaped mostly to avoid trouble.
Powell is scheduled to speak at 10:05 a.m. EDT as the main act in a research conference that will include top global central bankers, economists and policymakers mulling how the world economy is changing following the COVID-19 pandemic, the global breakout of inflation, and other events. Beyond that he could begin sketching out how he thinks about the next stage of the Fed's policy discussions -- namely how long to keep rates at the currently high level -- or stick with the theme of the conference and lay out his views on issues like the nature of inflation, what might allow "disinflation" to continue, or whether the structure of interest rates may have changed.Powell and other Fed officials view the U.S.
Yet even though inflation by key measures remains more than double the Fed's 2% target, it has dropped significantly from last year. Fed officials in fact have begun discussing the possibility of rate cuts down the road, at least in the context of steadily falling inflation. If inflation does decline as expected, Fed officials including Powell have suggested rate reductions might be appropriate to maintain a roughly constant inflation-adjusted "real rate.