- Says he would take 'seriously' a negative GDP reading
- Will reserve judgement on 50 vs 75 bps until July meeting
- Want real rates positive across the yield curve
- He 'definitely' sees signs of economy softening, particularly among low-income consumers
- Expectation is for another elevated CPI report
- Feels like business inflation expectations remain under control
- Avoiding recession hinges on how much inflation control has to come through through demand versus better supply and lower commodity prices
This is some relatively-dovish stuff and relates back to what I've been writing about the Fed's inflation framework not including recession. If negative growth hits, it will mean lower inflation forecast from the Fed and -- by extension -- less need to hike. At this point, they're likely committed to getting to 3% but we could see a pause afterwards.