What to expect from Jerome Powell’s speech at the Fed’s annual conference.

Expectations for what Jerome H. Powell, the chair of the Federal Reserve, will say on Friday as he addresses the central bank’s most important annual gathering have changed drastically over the course of a few weeks.

Investors initially expected Mr. Powell to use his remarks at the Jackson Hole economic symposium to lay out the Fed’s plan for “tapering” — or slowing down — a large-scale bond buying program it has been using to support the economy. Fed officials are debating the timing of such a move, which will be their first step toward a more normal policy setting.

But after minutes from the central bank’s July meeting suggested that the discussion remained far from resolved, and as the Delta variant pushes coronavirus infections higher and threatens the economic outlook, few now expect a clear announcement, The New York Times’s Jeanna Smialek reports.

Mr. Powell’s speech, which will be virtual, could instead give him a chance to explain how the Fed is thinking about Delta variant risks, recent rapid inflation and labor market progress — and how all three square with the central bank’s policy approach.

The Fed is buying $120 billion in government-backed bonds each month, and it has kept its main interest rate near zero since March 2020. Both policies make borrowing cheap, fueling spending by businesses and households and bolstering the labor market.

Officials have clearly linked their interest rate plans to their new framework: They said in September that they would not lift rates until the job market reached full employment. Bond-buying ties back less directly, but it serves as a signal of the Fed’s continued patience.

Mr. Powell used his remarks at last year’s conference to announce that Fed officials would no longer raise interest rates to cool off the economy just because joblessness was falling and inflation was expected to heat up. They first wanted proof that prices were climbing sustainably, and they would welcome gains slightly above their 2 percent goal.

He was laying groundwork for a far more patient approach, acknowledging the grim reality that across advanced economies, interest rates, growth and inflation had spent the 21st century slipping lower in a strength-sapping downward spiral. The goal was to stop the decline.

But a year later, that backdrop has shifted, at least superficially. Big government spending in response to the pandemic has pushed consumption and growth higher in the United States, and inflation has rocketed to levels not seen in more than a decade. The labor market is swiftly healing, though it has yet to fully recover.

As the economy rebounds, the Fed’s new framework is facing its first real test — and what central bankers do next could determine how transformative it proves. Withdrawing policy support too late could cause economic or financial imbalances, critics warn, but moving too soon could cause investors to question the Fed’s commitment to building an inclusive labor market and stabilizing inflation trends over the longer run.

Mr. Powell will speak at 10 a.m. and we’ll carry his comments here live.

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