- Current policy “not quite” in restrictive territory, needs to be over 5% at least
- Fed wants to ‘guarantee’ inflation will be on a steady path back to target and not waver on that
- Wants to err on the tighter side to allow disinflationary process to take hold
- Last half of 2022 surprised to the upside on jobs and GDP
- Global economic factors have improved with easing recession risks in Europe and China moving towards reopening. But that could fuel inflation
These comments read exactly like a central bank that’s going to stay too tight.
