With its larger-than-usual half-point cut to its key interest rate last week, the Federal Reserve underscored its belief that it’s all but conquered inflation after three long years. The public at large? Not so much. Consumer surveys, including one released Friday by The Associated Press-NORC Center for Public Affairs Research, show that most Americans remain unhappy with the economy, still bruised by an inflation rate that hit a four-decade high two years ago as the economy rebounded from the pandemic recession. Yet in the view of some economists, the shift toward steadily lower borrowing rates could eventually boost consumer sentiment. Inflation has sunk for more than two years and is nearly back down to the Fed’s 2% target. Though that means overall prices are still rising, they’re doing so much more slowly. The costs of some high-profile consumer goods, from used cars to grocery prices, have actually been falling. Economic history suggests that a low, stable inflation rate, with prices rising only gradually, eventually leads Americans to adapt to higher price levels. One favorable factor is that average incomes are now rising faster than prices, allowing more households to afford necessities. The issue remains a heated one in the political campaign. Seeking to capitalize on public discontent, former President Donald Trump has blamed the Biden-Harris administration’s policies for having caused inflation to spike. Yet Friday’s AP poll found that voters are now roughly split on who they think would better handle the economy, Trump or Vice President Kamala Harris. Back in June, an AP poll had found that six in 10 disapproved of President Joe Biden’s economic record. That is a sign that, at least seen through a political prism, Americans’ economic views have begun to brighten. Powell also provided a colloquial definition of the Fed’s mandate to seek “price stability.” “A good definition of price stability,” he said, “is that people in their daily decisions, they’re not thinking about inflation. That’s where everyone wants to be — back to, ‘What’s inflation?’ Just keep it low, keep it stable.” Powell did not suggest that the Fed had fully succeeded in that goal. He acknowledged that consumers are still “experiencing high prices, as opposed to high inflation,” which he said is “painful.” But, he added, “I think we’ve made real progress.” Sofia Baig, an economist at the polling firm Morning Consult, noted that Americans still see high prices as a financial burden. When people think about inflation, she said, they are likely thinking about how much lower prices were two or four years earlier. Fed officials and economists, by contrast, typically measure success in shorter-term durations — prices compared with a year ago, six months ago, even one month ago. Over time, Baig said, consumers typically adjust to higher prices, particularly as their incomes catch up. “You hear your grandparents talking about a bottle of Coke costing some egregiously low amount,” she said. “So inflation has always been happening, but, at a certain point you kind of take in the new prices and get used to it.” Some of the gloom surrounding the economy has likely been heightened by the political attacks Trump and his Republican allies have waged for three years against the Biden-Harris administration, focused relentlessly on inflation. Many economists have noted that high inflation was a global phenomenon […]