Why the Fed Shouldn’t Stop Worrying About Inflation: Editorial

At the recent central-bank symposium at Jackson Hole, Federal Reserve Chairman Jerome Powell delivered a widely expected message on interest rates: “The time has come for policy to adjust.” He all but confirmed that the Fed would cut rates by at least a quarter-point when its policymakers next meet in September.

A modest cut makes sense. Inflation remains a little above target but continues to subside — and thanks to a cooler labor market, a lower policy rate would suffice to maintain gentle downward pressure on prices. That said, one of the points Powell made in his address deserves emphasis. ...