Former Minneapolis Fed President Gary Stern: We need to keep our eyes on inflation expectations

• Fed Chair Powell is expected to re-emphasize the commitment to achieving the 2% inflation objective.
• The economy is not currently 'running hot,' suggesting no immediate need for a rate hike next month.
• Inflation expectations could deteriorate due to disruptions from the conflict in Iran and tariff situations.
• Non-monetary policy actions, such as removing tariffs or increasing labor supply, could help diminish inflationary pressures.

Former Minneapolis Fed President Gary Stern discusses expectations for Fed Chair Powell's Jackson Hole speech, emphasizing the Fed's commitment to its 2% inflation target. He suggests the economy isn't currently overheating to warrant immediate rate hikes but warns of potential deterioration in inflation expectations due to geopolitical conflicts and tariffs. He also highlights non-monetary policy tools that could help manage inflation.