Throughout the Federal Reserve's drive to kill inflation, policymakers have focused on raising the benchmark overnight interest rate high enough to do the job and getting it there fast enough to keep the public from losing faith.
rose 4.5% for the 12-month period ending in June, another decline from pandemic-era highs but also above what the Fed would regard as consistent with its 2% inflation target.
"We need to see that inflation is durably down ... Core inflation is still pretty elevated," Powell said in a press conference after the end of the Fed's two-day policy meeting. "We think we need to stay on task. We think we're going to need to hold policy at restrictive levels for some time. And we need to be prepared to raise further."
Things have been edging that way. Though the unemployment rate remains low, workers are quitting less frequently, job openings have fallen, and wage increases have slowed, suggesting an employment market cooling from pandemic years characterized by labor shortages and large wage increases. While the latest Fed policymaker projections, issued in June, show rates falling by the end of 2024, the decline is less than the expected drop in inflation, which means the inflation-adjusted interest rate is really still rising.
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