When the world’s central bankers meet this week in Jackson Hole, Wyo., the topic on the table will be how to foster a dynamic global economy. For America’s central bank, the Federal Reserve, the biggest problem is at home, not abroad, and its latest view on the economy, released last week, shows it may not have a handle on it.

As Fed officials try to make sense of how low unemployment, which should drive up wages and prices, persists side by side with low inflation, most simply assume that inflation will rise by next year as labor demand lifts wages and higher wages lead to rising prices. This belief has led to two interest rate increases so far this year, in effect tapping the brakes on growth to fight inflation, with another rate increase expected this year. A more plausible view is that persistently low inflation shows the economy is more fragile than policy makers want to admit, and needs to be helped, not handicapped.

Core inflation, which excludes volatile food and energy prices, has fallen short of the Fed’s 2 percent target every month for five years, and decent pay raises for most working people have been few and far between, even as unemployment has dropped by nearly half, to 4.3 percent. The Fed has had to continually pull back its inflation projections.

Another sign of weakness is that eight years into an economic expansion, the share of employed workers ages 25 to 54 is less than before the Great Recession.