Inflation, as measured by the consumer price index, ticked up a bit in August, 0.4% from July and 2.9% over last year. 

Core inflation — excluding volatile food and energy prices — is a little higher, at 3.1%. 

Both are inching further away from the Fed’s goal of 2%. And while inflation accelerates, the job market is slowing. Which means both parts of the Fed’s dual mandate — stable prices and maximum employment — are in jeopardy.

That puts Jay Powell and the Federal Open Market Committee in a tough spot.

Nothing about the latest inflation or jobs numbers is all that bad. Inflation is right around 3% and the unemployment rate is a little over 4%.

“But here's the problem. It's not the level of these variables, it's the trend. They are moving in the wrong direction,” said Kevin Jacques, a former economist at the U.S. Treasury Department.

He said the Fed has one tool to try to fix that problem: interest rates. If they decide to cut rates, there’s give and take.

“Inflation would go up, but unemployment would go down,” Jacques said.

And if they decide to leave rates high, that could keep inflation down but might push unemployment up. 

Ann Owen at Hamilton College said that creates a dilemma for the Fed. 

“Because they can lower rates to improve labor market conditions, or they can choose not to lower rates to keep downward pressure on inflation,” Owen said.

But — they can’t do both.

For the last couple of years, Owen said, the Fed’s focus has clearly been inflation. It had gotten high, and employment had stayed solid. So, the priority was clear. But the predictions tell a different story.

“The predictions about the labor market and the information coming from the labor market is screaming a lot louder than inflation right now,” Owen said.

So the Fed’s focus might shift to the other half of its dual mandate: maximum employment.

Bill English, at the Yale School of Management said what to prioritize is not as clear cut as it was a couple of years ago. Inflation isn’t exactly where the Fed wants it to be either.

“They continue to have to trade off the outlook for inflation and the outlook for employment and also the risks to those things and that's hard to get right,” English said.

Still, he said, that’s what they’re trying to do.