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Why Is It So Hard for the Fed to Curb Inflation?

Without a playbook to turn to, officials are still grasping for solutions.

By , a reporter at Foreign Policy.
Federal Reserve Chairman Jerome Powell testifies during a Senate Banking Committee hearing on Capitol Hill in Washington, D.C.
Federal Reserve Chairman Jerome Powell testifies during a Senate Banking Committee hearing on Capitol Hill in Washington, D.C.
Federal Reserve Chairman Jerome Powell testifies during a Senate Banking Committee hearing on Capitol Hill in Washington, D.C., on Sept. 24, 2020. Drew Angerer/Getty Images

For more than a year, the U.S. Federal Reserve has launched an unusually aggressive campaign of sharp interest rate hikes in its desperate bid to push down inflation, which currently looms above 4 percent. After 10 consecutive increases, officials announced on Wednesday that they would be pressing pause—for now—leaving the benchmark rate at 5 percent to 5.25 percent. But as long as their goal of 2 percent-or-so inflation remains elusive, the Fed warned it could raise interest rates again later this year.

Christina Lu is a reporter at Foreign Policy. Twitter: @christinafei

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