For now, the Fed thinks it can manage this without a hard landing.
Even so, Powell is correct to say that inflation is worse than even a reversal in growth.
Around half of small businesses now say inflation is their biggest challenge, according to the U.S. Chamber of Commerce, and the public agrees, a Pew survey showed in May.
The Fed said in a statement that inflation remained elevated, echoing its previous statement in July, with “modest growth” in spending and production.
In its updated set of economic projections, the Fed forecast 4.4% unemployment in 2024, compared with its previous forecast of 4.1%.