Fed Officials Dispel Specter of Deflation

Inflation risk assessment shows worry of Japan-like drift downward in consumer prices is gone, but a recession could bring it back

When Federal Reserve officials gathered last month for Jerome Powell’s first meeting as central bank chairman, not a single official among 15 saw a downside risk to inflation.

It marked a milestone.

The Fed’s mind-set has been shaped during the entire post-financial crisis era by a fear of Japan-like deflation, a downward drift in consumer...