They should have known better, those central bankers and policy-watchers who thought that Janet Yellen's speech at Jackson Hole, Wyoming, on Friday would mark a volte-face. Yellen, who skipped last year's meeting, came to Jackson Hole under pressure from important colleagues to commit to raising interest rates, preferably starting next month. The raise-rates-now contingent is not easily ignored: It includes, among others, William Dudley, William Lockhart, John Williams, and Esther George, presidents of the New York, Atlanta, San Francisco, and Kansas City regional Federal Reserve banks. Williams puts it this way, "In the context of a strong domestic economy with good momentum, it makes sense to get back to a pace of gradual rate increases, preferably sooner rather than later." They believe that the risk of not acting, which includes future inflation and the bursting of home and share price bubbles, exceeds the risk that a small rate increase will turn the current 1 percent growth rate into a new recession. Jacob Frenkel, former governor of the Bank of Israel and chairman of JPMorgan Chase International added his support for an increase, "Everything that was supposed to happen" as a result of zero interest rates "has happened…. There will always be headwinds."

Yellen bowed in their direction by conceding that the expanding economy has "strengthened" the case for gradual rate hikes, hinting that she is a tad more likely to respond to continued good news with a rate increase than in the past. When rates are raised, after a gradual process she expects them to settle at 3 percent, rather than the 7 percent average between 1965 and 2000. But the Fed chair gave no commitment to begin such a gradual rise next month or even this year. In short, as Margaret Thatcher once said of herself, "To those waiting with bated breath for that favourite media catchphrase, the U-turn, I have only one thing to say: … The lady's not for turning." One market participant was more than a little annoyed, "More hawkish talk to be followed by dovish action." Translation: "Yellen talks the talk of rate increases and walks the walk of zero interest rates." In short, the Fed remains dependent on "incoming data", the only alternative in the view of vice chair Stanley Fischer, being to "toss a coin".

That out of the way, Yellen turned to the theme of the conference. Apparently anticipating that this meeting, unlike most of its predecessors, would benefit from the absence of a crisis atmosphere, the Federal Reserve Bank of Kansas, host and convener of this pay-if-you-want-to-come gathering, called on participants to take the long view in "Designing Resilient Monetary Policy Frameworks For The Future." Yellen took that to call for a review of the arsenal the Fed has available should the U.S. economy lapse into another recession if the current semi-recovery runs out of steam. She is satisfied that even if the bank has little room to cut already-low interest rates, it can use other tools, including bond purchases, to prevent or moderate a recession other than one that is "unusually severe and persistent".

But she nodded in the direction of former treasury secretary Larry Summers and others by noting that fiscal policy will have a role to play in enhancing the "cyclical stability of the economy". She might have added that in addition to looser fiscal policy, the Fed will need growth-oriented tax policies and a reduction in productivity-stifling regulations if it is re-create a sustained period of annual growth of 3% or more. Fed vice chair Stanley Fischer knows that. He told an audience in Aspen, en route to rival ski resort Jackson Hole, "The key to boosting productivity growth, and the long-run potential of the economy, is more likely to be found in effective fiscal and regulatory policies" than in monetary policy. Like others, he supports Summers' call for stepped-up public "investment", or what economists less taken with the teachings of John Maynard Keynes and more worried about mounting deficits call public "spending". The likely next president of the United States will try to persuade congress to increase spending, but she is also committed to opposing tax reform and to increasing rather than decreasing the regulatory drag on economic growth. The Fed cannot realistically look for meaningful help from a Clinton presidency should the economy take a dive.

The attention paid by the world's central bankers to Yellen's predictably stand-pat speech proves one thing: Anyone who thinks that America is no longer the world's most consequential economic power should think again. When the Fed changes economic policy, that change is transmitted around the world through changes in the value of the dollar. An increase in interest rates here means that developing nations that must pay debts and interest on those debts in dollars have to use more of their local currencies to buy the dollars they need. It means that other countries might have to raise interest rates to staunch a flight from their currencies to the dollar, stifling their growth.

There was more to the meeting than Yellen's speech. Central bankers who support negative interest rates, a no-no to Yellen and Bank of England governor Mark Carney, explained why those rates have not quite had the effect of raising inflation in their countries, yet, proving that hope springs eternal in some bankers' breasts. Fed officials agreed to meet with an activist group, Fed Up, that wants the Fed to guarantee full employment for blacks, appoint more blacks and Hispanics to top positions, and tackle inequality. Since the Fed's zero-interest-rate policy has contributed to inequality by raising the value of assets such as homes and shares, owned by those already sufficiently well off to possess such assets, asking the Bank to reduce inequality is rather like asking a pyromaniac to serve as fire chief. Besides, Fed Up's other demand—no rate increase—is not quite consistent with its call for monetary policy that reduces inequality. A request for new ideas does have its costs.

The meeting began with an unpromising omen: Headwinds whipped smoke from fires in California, obscuring the glorious view of the Grand Tetons. These bankers know all about headwinds of a different sort —events that are preventing many economies from achieving more rapid growth rates. And, in the case of our Federal Reserve Board's monetary policy gurus, from raising interest rates. And they know all about partially obscured views: Those are the sort they see in their crystal balls. Fortunately, the bankers' views of the mountains cleared by the time they headed home. It is not certain that their views of the world's economic future also became clearer.