The Fed Can Take Its Time Taming Inflation

June 16, 2024, Opinion: "Two years ago the six-month annual pace of core inflation was 6%. Now it has fallen to 3%, without a recession. Does that mean we can count on inflation easing painlessly to 2% and the Fed can begin cutting rates in anticipation of an imminent soft landing? While the past several years fostered humility among economists, the much-reviled traditional model for inflation forecasting still provides a valuable framework for thinking about the rise, fall and future of inflation. This framework offers many reasons why the last mile of disinflation could be the hardest, validating the Fed’s caution on rate cuts."