As inflation drops, the Fed’s big challenge: What’s next?

At the Federal Reserve’s policy meeting this week, the big question will be less about what to do now (which is likely “nothing”) but what, if anything, to do next.

Why it matters: Inflation looks to be on a glide path downward, even as economic growth shows surprising resilience. Against that backdrop, Fed officials must decide whether they need to push interest rates even higher to truly vanquish inflation.

Assuming the Federal Open Market Committee elects not to raise rates, the tone of chair Jerome Powell’s post-meeting news conference could offer important clues…