When the Kansas City Federal Reserve’s annual Jackson Hole Economic Policy Symposium (this year on “Reassessing Constraints on the Economy and Policy") opened Friday morning, Aug. 26, first up at 8 a.m. was Fed Chair Jerome Powell to deliver “The Word” to the usual dozens of central bankers, policymakers, academics and economists who come to these rituals.
Said Mr. Powell, in summary: Having brought you nothing in the dozen years after the Crash except an exploding stock market; then having brought you a runaway inflation and disappearing real incomes; now the Fed will bring you “pain.” “Some pain,” to quote him exactly. Included in that pain is higher unemployment, he made clear.
His brief speech was laced with phrases such as: “reducing inflation is likely to require a sustained period of below-trend growth;” monetary policy “will be sufficiently restrictive;” and defeating inflation “will likely require maintaining a restrictive policy stance for some time”—i.e., interest rates will continue to rise sharply over the foreseeable future.
