by Kristin Schwab
Market Place
The Federal Reserve will start its annual conference of central bankers in Jackson Hole, Wyoming, on Thursday, and the central topic will be inflation and interest rates. Clues may emerge about whether the Fed will begin cutting in September.
The July consumer price index did make a cut appear more likely. It came in at 2.9% over the prior 12 months. But, of course, that’s not 2% — the Fed’s inflation target — which means there’s still some ways to go. How hard will it be to get there?
To understand what the Fed is up against in the coming months, year or however long it takes, it’s helpful to understand why the Fed may start paring interest rates before inflation hits 2%.