In the - you know, in the past - the reason it's tricky is that in the past, in order to bring inflation down, the Fed has had to slow the economy to make it to below its - really, its full employment level. KUTTNER: Well, I wish I knew the answer to that. INSKEEP: Well, have they done enough in interest rates or will they, after today, have done enough, do you think, to crush inflation or at least squeeze it down near that two? I think they'd be happy if they got anywhere within shouting distance to two at this point. INSKEEP: Which is what? Two percent is their ideal, is that right? But it certainly hasn't fallen back to where the Fed wants it to be. KUTTNER: Well, I think, to me, it looks like it's edging down a bit. INSKEEP: And what does it look like to you? And so they're trying to look past those ups and downs in gas prices to figure out what the underlying trend is going to be in inflation. But obviously, the Fed people are most concerned with where that's headed, where the trend is. As you say, there's a lot of ups and downs from month to month. KUTTNER: Well, I'm sure there's a lot of nail-biting going on inside the Fed. But now that we are in this uncertain period, how does inflation look to people inside the Fed? And lately, maybe they've been back up a little bit again. INSKEEP: I'm glad you've been inside the Fed because I, from the outside, see inflation anecdotally, you know? Gas prices are up for me and later they're down. So have they done enough? Ken Kuttner is a professor of economics at Williams College and a former assistant vice president of research at the Fed. The Fed has been acting against inflation, of course, which now seems to be easing. The Board of Governors has signaled they plan another interest rate hike, the eighth in the space of less than a year. The Federal Reserve begins a two-day meeting today.
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