At Jackson Hole, Federal Reserve Chairman Kevin Warsh said, “Trends matter most.” His task forces are examining how to improve monetary policy, but the next decision will test how he applies that principle today. The Fed must ground its judgment in a careful reading of the economy and explain why the evidence supports it. For families considering a home and business owners deciding whether to expand, that judgment shapes borrowing costs, investment plans, and opportunities that can last for years.

For small business owners, an improvement in financial conditions does not necessarily mean borrowing has become affordable. NFIB’s August survey put the average rate on short-term loans at 7.5%, down from 8.1% a year earlier. That is progress, but financing still carries a substantial cost. An owner weighing new equipment must judge whether the additional production and sales will justify the payments.