As the dust settled after last week’s Federal Reserve rate cut, Fed Chair Jerome Powell said his team of economists faced a “challenging situation,” meaning a slowing labor market combined with continued inflation.

“Two-sided risks mean that there is no risk-free path,” Powell told reporters Tuesday.

Powell isn’t the only member of the Fed leadership to speak this week. Atlanta Fed president Raphael Bostic also spoke Tuesday, and we’re going to hear from a number of other regional Fed presidents and Fed governors over the next few days.

One comment that stuck out was a speech from newly appointed Fed governor Stephen Miran. He argued that interest rates are currently too restrictive — especially for the labor market. And he added that “the appropriate Fed funds rate is in the mid-2 percent area.” That’s almost 2 percentage points lower than current policy.

What Miran is talking about is a series of half-percentage point rate cuts over the course of the next few Fed meetings.

Guy LeBas, chief fixed income strategist with Janney Montgomery Scott, said if that were to happen, the first place you’d see an effect is in government bond yields.

“Two-year yields might drop, by, say, 1.5%. Five-year Treasury yields might drop, by, say, 1%. And 10-year Treasury yields might drop by, say, half a percent,” he said.

LeBas said that drop tapers off for longer-term bonds, because the Fed doesn’t have as direct of an influence over them.

Either way, he said falling short-term Treasury yields would have a similar effect on a variety of loans.

“On credit card borrowings, which would happen almost immediately. They are tied to short-term interest rates, as are student loan borrowings. And there would be less, and more gradual an effect, but still a significant effect, on mortgage rates,” he said.

People would also earn less interest on their savings accounts.

LeBas said all of this would encourage more spending.

“And that occurs both at the corporate level, and also at the consumer level, which is a bigger portion of the overall economy,” he said.

All that spending might have some side effects.

“The fear of course … is what happens with inflation,” said Winnie Cisar, global head of strategy at CreditSights.

She said inflation is already higher than the Federal Reserve is comfortable with. So if it rises more?

“Then the Fed is having to talk about well, maybe we’ve been a bit too accommodative in our policy, and it may be time to start hiking rates again,” Cisar said.

Higher inflation would likely cause long-term bond yields to rise ahead of any Fed rate hikes.

Skanda Amarnath, executive director of the research group Employ America, said that’s because investors would demand higher yields to reflect all of the risks.

“Both risks that interest rates might have to rise in the future, and also just that inflation itself might erode my returns,” he said.

That would push up the cost of mortgages and corporate borrowing costs, Amarnath said.

“It’s probably more challenging for businesses, for households, to spend, whether that’s on a house, whether that’s on a new investment for a business, in a world of higher financing costs,” he said.

That could cause the economy to slow down and unemployment to pick up.