Central bankers and top academics departed here on Sunday after two days of discussions on how the global economic landscape is shifting, according to Reuters. But they said goodbye still divided on what is perhaps the biggest question hanging over the outlook -- whether an unfolding slowdown in the U.S. economy will curb U.S. inflation without further interest-rate rises from the Federal Reserve. While Fed policy was not a primary focus of the formal discussions at the Kansas City Federal Reserve Bank's annual Jackson Hole retreat, it was a hot topic on the sidelines. "I think this is a time of a fair amount of uncertainty, because certainly there seems to be a shifting in the United States," IMF chief economist Raghuram Rajan said. "We're not quite sure if inflationary pressures are contained ... and we are also not sure how far and how quickly housing will slow." After two years of steadily pushing benchmark borrowing costs higher, the U.S. central bank stepped to the sidelines at its last meeting on Aug. 8, preferring to wait for more data shedding light on the outlook for growth and inflation. A downturn in the U.S. housing market is seen cutting the wherewithal of U.S. consumers, who have been able to tap the equity fast rising home prices had provided to maintain their free-spending ways. Former Brazilian central bank chief Arminio Fraga fretted that a slowdown in the United States, for years an engine supporting growth around the globe, could exact a big toll on economies elsewhere. "Can the world make up for what is likely to be a slowdown in (U.S.) growth, maybe even a bigger slowdown than one expects at this point -- certainly a deeper slowdown than markets are pricing in?" Fraga asked conference participants.
