But inflation remains a dirty word in much of America, making that tweak a tough sell.
In a move that could help improve the optics of any change, Mr. Powell and his colleagues have involved ordinary people in the conversation.
As central bankers and academic economists have gathered to consider the future, they have also met with job placement professionals, community organizers and single parents in board rooms, food pantries and classrooms to talk about how monetary policy affects their lives.
In November, Mr. Powell spent time in East Hartford, Conn., where factories still buzz but sagging houses and defunct stores dot the side streets. Mr. Powell spoke with local leaders gathered in an elementary school gymnasium, took a bus tour of the area and scribbled notes as community members talked about a labor market development initiative.
“I felt like he was genuinely interested,” said Amy Peltier, who directs the program.
Not everyone buys the message. Like Mr. Trump, Senator Bernie Sanders, who is seeking the Democratic nomination for president, has questioned the Fed’s decision to raise interest rates nine times between 2015 and 2018.
Officials made those moves, all of which Mr. Powell voted for, because they expected low unemployment to begin to spur higher inflation. It hasn’t, even after they cut rates three times in 2019 in response to trade uncertainty and a weakening outlook.
Mr. Powell has never said the Fed made a mistake. But he led on last year’s pivot — hinting that the Fed might consider rates cuts in a June speech. He worked to build consensus around the three cuts, even as some voting members dissented against reducing rates at a time when unemployment hovered near a 50-year low.
“He’s not wedded to some model he was taught 40 years ago in graduate school,” Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said in an interview last month. “I think he’s probably aided by the fact that he doesn’t have a Ph.D. I think that has helped him to make the shift he has made over the past year.”