A year ago, Chair Jerome Powell warned that to fight high inflation, the Federal Reserve would continue to sharply raise interest rates, bringing “some pain” in the form of job losses and weaker economic growth. Since Powell spoke at the conference of central bankers in Jackson Hole, Wyoming, the Fed has raised its key rate to its highest level in 22 years. Yet so far, not much pain has arrived. As Powell and other central bankers return to Jackson Hole, the economy’s resilience has raised the prospect that the Fed will need to keep its key rate higher for longer than had been expected to slow growth and tame inflation.
