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The Fed walks a fine line. It needs to stockpile ammunition to fight the next recession without causing that same recession in the process. Officials would like higher interest rates and a clean balance sheet heading into a downturn. They would like to prevent price swings whose knock-on effects could spark said downturn by keeping inflation near their 2 percent target rate. The broadest version of the Fed’s preferred measure of inflation has been at or above the 2 percent target rate since March. And the economy has grown at an annualized rate of 4.2 and 3.5 percent in the two most recent quarters, well above its long-term average. The U.S. unemployment.

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