When Chair Jerome Powell and other Federal Reserve representatives gather this week for their latest decision on interest rates, they will do so as they continue to curb inflation without causing a deep recession.

Yet even though the U.S. Fed is poised to raise its key rate this week for the eleventh time since March 2022, no one seems to be panicking.

Economists and financial traders have grown more optimistic that what some call immaculate disinflation, a steady easing of inflation pressures without an economic downturn, can be achieved.

Here in Canada, the central bank is cautioned by Benjamin Tal, deputy chief economist at CIBC, to stop raising interest rates.

“So I think that the Bank of Canada, quite frankly, is starting to overshoot,” Tal explains, “There is a major disinflationary process happening now. The supply chain is improving, commodity prices are stabilizing, the housing market is slowing. If you take interest payments out of the story, we are already a target. So I think the Bank of Canada has to be very careful not to overshoot.”

The most interest rate decision last week was a quarter point increase to the key lending rate. In the following days, we received good news on inflation, which was up 2.8 percent in June of 2023 from June of 2022.