At the beginning of February, the chair of the Federal Reserve Jerome Powell was sounding

optimistic about his fight against inflation.

At a press conference, he kept saying one word over and over again.

Disinflation, meaning a slowdown in inflation.

Powell used the word 15 times.

Disinflation, they don't see disinflation.

Disinflation, disinflation.

And that really spoke to the mood at the time.

People were talking about when the Fed is going to be done raising interest rates because

people think inflation is going to slow down.

Investors and financial markets at that time were expecting a really rapid decline in inflation

this year.

A miraculous melting away of inflation.

But our colleague, Nick Timmeros, says that this week Powell sounded very different.

Fedger J. Powell delivered his twice yearly testimony to lawmakers.

And what was significant was that he hinted at a possible shift in the Fed's interest

rate tactics.

We're looking at a reversal, really, of what we thought we were seeing to some extent.

He suggested that actually they might want to go back to making some bigger moves here

because the economy is looking hotter than they thought it was.

And that could mean more and bigger interest rate hikes.

Welcome to the journal, our show about money, business, and power.

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