Comments from Brainard:
- The best way to achieve goals is to remain steady and clear in approach while remaining attentive to conditions
- Jobs are down 8-10 million from levels where they would be without pandemic
- Says she's attentive to risks on both sides of expected path
- Says it will be important to see sustained progress on inflation
- If inflation moves materially and persistently above 2%, the Fed has tools to guide it back down
- Inflation and employment data reflect a temporary misalignment of supply and demand
The Fed believes that when unemployment benefits are cut, there will be a flood of workers and that will keep wages in check to a degree. I can see the arguments both ways but the Fed has the luxury of time and they've decided to simply wait and see. That's a fine approach because, like she said, they can just hike if it goes wrong. I do wonder if they'll have to guts to make that move but that's a debate for later. Right now, the trade is to ride the Fed wave.
- Will watch data 'exceptionally closely'
- Temporary factors are affecting inflation but we expect it to move down towards target after the reopening phase
