With US inflation at a 40-year high, economists say there is no doubt about the Federal Reserve's policy course: Interest rates will continue to rise.
Against the backdrop of the majestic Grand Teton mountains, Fed Chair Jerome Powell is expected to once again send a clear message at the annual gathering of central bankers in Jackson Hole, Wyoming on Friday that the fight against inflation is not over.
Modest signs of slowing in the world's largest economy and easing price pressures spurred hope in financial markets that the central bank might ease up on its aggressive rate hikes, and perhaps even start to reverse course next year.
But former Bank of England board member Adam Posen called that view "nonsense."
"I think there's wishful thinking on the part of the markets," said Posen, who leads the Peterson Institute for International Economics in Washington.
"Right now there's no debate," he told reporters. "They've got no choice but to hike."
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Until and unless there is a recession that also pushes down inflation expectations, "nothing else matters" besides bringing down prices.
A succession of Fed officials, even those like Posen who are considered to be "doves" on inflation, have repeated the same message.
Kansas City Fed President Esther George, host of the Jackson Hole conference, did so Thursday, telling Fox Business Network that rates are likely to rise through the end of the year until "inflation begins to meaningfully decelerate."
Posen said he expects the benchmark lending rate will reach four percent by February, and will be "willing to go further if needed, with the chances of a reversal in 2023 year "very, very low."
New price data
Economist Tim Duy of SGH Macro Advisors agreed, and said Powell will "push the story... they will do what they need to get inflation under control."
"What that means is pushing rates into restrictive territory," he told AFP.
But he said the Fed chief will have to be "humble" about any forecasts on the path of the economy or inflation, after telling the conference last year that price spikes would be transitory.
Powell's speech last year "didn't age well, to say the least," Duy said.
Supply chain issues have continued, worsened by a series of Covid lockdowns in China, and have combined with Russia's war in Ukraine, to send prices soaring worldwide.
In the battle to contain red-hot US inflation, which topped nine percent in June, the Fed has hiked rates four times, including massive, three-quarter point increases in June and July -- steep moves unheard of since the early 1980s -- to the current level of a range of 2.25 to 2.5 percent.
But recent data has shown signs of a slowing in price increases.
Before his speech, Powell will get a look at the latest report on the Fed's preferred inflation measure, the personal consumption expenditures price index.
That is expected to show a dramatic slowdown from the 1.0 percent surge in June, although central bankers may not take much comfort since it is likely to reflect the recent sharp retreat in global oil prices.
Avoiding a recession as interest rates rise remains a tough job for central bankers everywhere.
"The post-pandemic economy globally will have more constraints that we faced for the last 25 years," Duy warned.