- Fed Chairman Jerome Powell will speak Thursday during a virtual version of the Fed’s annual Jackson Hole, Wyoming, conference.
- He is expected to outline what could be the central bank’s most active efforts ever to spur inflation back to a healthy level.
- “Average inflation” targeting means the Fed will allow inflation to run higher than normal for a period of time.
- The effort will be the reverse of former Fed Chairman Paul Volcker’s rate hikes instituted to quash inflation in the 1980s.
History will remember Paul Volcker and Jerome Powell as standing on the opposite ends of the inflation canyon, with the former taking desperate actions to try to tamp it down and the latter expected this week to announce an unprecedented effort to crank it back up.
Volcker, the Federal Reserve chairman from 1979-87, ushered through a series of inflation-busting interest rate hikes that dragged the country into recession but won the fight against pricing pressures and spurred a powerful economic recovery.
Powell, the central bank chief since 2018, is likely to detail a set of measures aimed at pushing inflation higher amid a coronavirus pandemic that has dragged the U.S. economy into one of its darkest hours.