Clarida on TV:

  • Substantial progress is 'actual progress'
  • We will have ample opportunities as data comes in to inform Fed observers on our progress
  • 2% inflation as a ceiling does not serve our economy very well
  • Higher headline inflation this year will be transitory
  • US is going to be growing rapidly this year relative to other countries and he expects the current account deficit to widen
  • If inflation at the end of the year has not declined from where it is at the middle of the year that might be 'good evidence' that inflation is not transitory
  • There's still a big hole in the labor market

The bolded comment is insightful to the Fed's thinking. They're going to evaluate at year-end on whether inflation is going back down or whether they need to act. The December 16 FOMC is going to be big, along with the PCE and CPI reports just before it.

The lines about substantial vs actual progress are Fed standards at this point but I don't know if that really tells us much. Inflation reports are already running above a 2% annualized pace and the US added almost 1m jobs last month. That's actual 'progress', so it's more a question of how much progress we need to see.