Highlights of his answers
- Nothing has happened since March to change his view on inflation
- FOMC continues to think they are just about at 2% goal but wanted to be sustainable
- FOMC generally believes fiscal policy will provide meaningful support to demand over the next 3 years
- Fed is strongly committed to 2% inflation target, barriers to changing that very high
- Economy has strengthened since we began for guidance
- Now was an appropriate time to remove forward guidance
- Fed contacts report concerns on US trade policy are rising
- Right now we don't see any impact on trade policy in any data
- Today is another sign US economy is in great shape
- FOMC see fiscal policy moves as supporting demand
- Slow pace of wage gains a bit of a puzzle
- Fed keep open mind, will monitor data
- No one really knows for certainty what is the natural rate of unemployment
- Uncertainty is why we have been gradually raising rates
- there is no sense in Feds models that inflation will move significantly higher if unemployment rate falls further
- we won't overreact to inflation being above 2%
- FOMC sees financial vulnerabilities as moderate
- Feds patience in hiking rates has borne fruit
- Rates will soon be neutral - assuming we stay on this path of gradual rate rises. We are getting there but not there yet.
- When interest rates approaches neutral it would no longer be appropriate to keep accommodative language in policy statement
- great environment for people to find jobs
- The yield curve is flattening in response to the Fed tightenings. You would expect that. It is not that much a concern.
