Inflation’s harsh realities on display as Fed officials meet
JACKSON HOLE, Wyoming (AP) — A half-hour drive or so from the resort where the high priests of international finance — leading economists and central bank officials — have convened in Jackson Hole, Wyoming, to discuss the world's economic challenges, Ash Hermanowski oversees the distribution of about 1,200 free meals a day.
At a food bank called Jackson Cupboard, Hermanowski hands out meals from a commercial garage after being forced from a previous site by a malfunctioning sprinkler. The food bank couldn't afford any other place in town.
Just across the street, The Glenwood, a collection of townhomes that will sell for millions, is nearing completion. "Unparalleled luxury," its website says, in a "truly relaxing oasis."
It's the "ultimate irony," Hermanowski said. "The staff and I, we talk about it all the time. We all struggle to live here, and they're building high-end residences. That dichotomy exists all over town, but people refuse to see it."
As the Federal Reserve's annual economic symposium gets under way Thursday at a lodge in Grand Teton National Park, some of the very problems Fed officials are grappling with — high inflation, soaring rental costs and home prices and wide economic inequalities — are starkly evident near the idyllic mountain setting.
On Friday, Fed Chair Jerome Powell will deliver a speech that could signal how high or how fast the central bank may raise interest rates in the coming months. Powell's remarks will be scrutinized by Wall Street traders and economists and could potentially cause sharp swings in financial markets.
In its drive to tame the worst inflation bout the nation has endured in four decades, the Powell Fed has embarked on its fastest series of rate hikes since the early 1980s. The Fed is trying to slow the economy just enough to cool inflation without causing a recession — a notoriously delicate task.
Inflation is particularly high in the town of Jackson and the surrounding Teton County, which, even before the pandemic erupted two years ago, was the wealthiest and most unequal place in the nation. (Jackson Hole is the name of the broader valley.) The state of Wyoming has calculated that the cost of living in the county at the end of 2021 was 68% higher than in the rest of the state — with housing costs 130% higher.
At the food bank, Hermanowski says, demand has escalated from a year ago as surging food and gas prices have sapped the budgets of their clients. Roughly 85% of the food bank's recipients have a job, often more than one, said Sharel Lund, executive director of one22, a nonprofit that includes Jackson Cupboard.
Like many resort towns, Jackson has always been expensive. But the pandemic turbocharged the disparities that have widened the gap between the wealthy and everyone else. Real estate prices soared as many affluent families, seeking to escape crowded cities, moved into the Jackson area or spent more time at vacation homes they already owned.