In a speech delivered less than a week after the Federal Reserve raised interest rates for the first time since 2018, Jay Powell acknowledged the historic challenge confronting the US central bank: tame the highest inflation in 40 years without causing a “hard landing” with painful job losses and a sharp economic contraction.

“No one expects that bringing about a soft landing will be straightforward in the current context,” the Fed chair cautioned last month. “Monetary policy is often said to be a blunt instrument, not capable of surgical precision.”

Powell punctuated his warnings with optimism about the US economy’s ability to handle tighter monetary policy, but his comments underscore just how difficult the task ahead will be for the central bank as it charts a new course after two years of unprecedented support.