- We have covered a lot of ground over the past year
- Full effects of hikes have yet to be felt
- Housing activity continues to weaken
- Consumer spending appears to be subdued
- Fed will likely have to maintain restrictive stance for some time
- The jobs market remains extremely tight
- Pace of jobs gains has slowed and nominal wage growth too, but labor market is out of balance
- Inflation in last three months show a welcome reduction in the pace of increases
- We will need 'substantially more evidence' to be confident that inflation is on a downward path
- Long term inflation expectations remain well anchored but the longer inflation remains high, the more likely it is to remain entrenched
- Fed highly attentive to risks from inflation
- The historical record cautions strongly against premature easing
This is hawkish stuff but I think the market built a lot of that in ahead of time.