Bankers Grapple with Inflation in Jackson Hole

Central Bankers Grapple with Inflation Challenge Amid Uncertain Economic Landscape

  • The Federal Reserve’s annual gathering is hosted by the Kansas City Fed in Jackson Hole, Wyoming.
  • The federal funds rate has crested above 5 percent.
  • Unemployment remains near 50-year lows.
  • Fed offi­cials’ own estim­ates of the neut­ral rate — also called R-star
  • The neutral rate of interest (R-star) is estimated around 2.5 percent.
  • The median forecast for R-star is around 2.5 percent, adjusted for inflation at 2 percent.
  • Some believe a soft landing, where inflation comes down without a recession, is possible.
  • Others are more skeptical, with predictions of a “hardish” landing that could lift the unemployment rate to at least 5 percent.