- Monetary policy will need to be restrictive for some time to have confidence inflation is moving back to 2%
- Uncertainty is currently high, there are a range of estimates on peak Fed funds rate
- Fed recognizes that risks may become more two-sided at some point
- Risk of additional inflationary shocks cannot be rued out
- As monetary policy tightens, it's important to consider how cross-border spillovers might impact financial vulnerabilities
- Fed is attentive to financial vulnerabilities that could be exacerbated by additional adverse shocks
- There is a risk that supply disruptions could be prolonged by Ukraine war, China covid lockdowns or weather
If there's going to be a pivot in Fed policy, I expect it will be Brainard that floats it before Powell. But this ain't it.