- Inflation is far too high
- Fears of a recession have faded, robust US labor market is giving us the flexibility to be aggressive in our fight against inflation
- It's too soon to say whether inflation is moving meaningfully and persistently downward
- Size of future rate hikes should depend on date
- I expect that getting inflation to fall meaningfully and persistently toward our 2 percent target will require hikes "until at least early next year"
- If path of economy falls mirrors SEP says he would support peaking rates near 4%
- Full text
This sounds like an endorsement of 75 bps. Here's the key line:
"Looking ahead to our next meeting, I support another significant increase in the policy rate. But, looking further out, I can't tell you about the appropriate path of policy."
He's also cooling the path of rates further out, or at least adding some two way risks.
"We shouldn't be estimating what the peak level of the target range will be and how quickly we will get there, because those details are much more dependent on what new economic data tell us than was the case when the only direction for the federal funds rate to go was up—and up by a lot."
He added to this that he expects hikes to continue but said that if the economy follows the path of the Fed's forecast, he would support a peak near 4% though says he doesn't have great confidence in that forecast. He also said if inflation "suddenly decelerates" then the peak could be below 4%.
Another key line:
"I support another significant hike in two weeks. After that, the tightening path will continue until we see clear and convincing evidence that inflation is moving meaningfully and persistently down to our 2 percent target."
I think this -- and Brainard -- represents the nuanced views of the Fed more accurately than the hawkish comments from Powell.