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Since inflation in America peaked at 9.1% in June 2022, the U.S. Federal Reserve has made controlling price increases — by keeping interest rates high — its main goal.
One consequence of tight monetary policy tends to be a slowing economy and a cooler labor market. For a while, that scenario didn’t materialize, leading many to think the Fed, under chair Jerome Powell’s piloting, had achieved the rare “soft landing,” in which the central bank manages to dampen inflation without plunging the economy into a recession.
But that “golden path” — as the Fed’s Austan Goolsbee likes to term it — is being tarnished by factors such as tariffs and a changing geopolitical landscape.
