More from Brainard (Q&A):
- Inflation a significant challenge for all Americans; requires consistent policies focused on that
- Supply indicators are getting better but still more constrained than before the pandemic
- Big improvement in the labor force participation for primate workers, but still see excess retirements among older workers
- Labor supply likely to remain below pre-pandemic level for some time
- Further shocks possible to food and energy prices due to Russia's war against Ukraine
- inflation for in-person services more linked to return of labor
- Fed very aware that it operates in a global economy and financial system
- Most central banks are united in fight against inflation; important to be transparent over policies
- Real important risk that inflation expectations could start to drift higher, which would make the Fed's job harder
- Easing prematurely is a risk, but at some point risks could become more two-sided
- Moving in the data dependent and deliberate ways allows Fed to learn how tightening is influencing inflation and economy
- Fed looking across a full gamut of data in assessing movements of inflation
- declining Fed balance sheet will reinforce its tightening of rates, but also recognize liquidity is fragile in some core markets