In October, Jay Powell hosted guests at the Federal Reserve’s Marriner Eccles building in Washington. They sat at the boardroom table where the Fed’s Open Market Committee makes its decisions about interest rates and the Fed’s balance sheet. Silk-walled and chandeliered, the room served as a secure meeting place for UK and US military staff during the second world war.

After several hours of conversation, Mr Powell, chair of the Fed’s board of governors since February 2018, said: “We think our inflation is a little bit lower than  we’d like it to be. But we realise for many people that sounds a little bit crazy.” 

He explained to his guests — representatives of non-profits, community groups and small businesses — that if inflation falls too far, the Fed loses its power to encourage banks to lend more. Then, smiling a bit, he asked them: “Do you have any ideas on how to explain that to the public?”