- Let's take a step towards neutral, recognizing that we're tight
- Lots of ambiguity around what neutral level is
- Fed policy is still in net tight position
- Labor market is strong, want to keep it that way
- 50 bps was a meaningful step to get process moving
- No one on the committee was saying we should be holding rates
- There's a lot of uncertainty about where Fed will cut to
- The jobs market is a lousy forecaster of inflation
- Says he pencilled in 50 bps more in easing in 2024
There's a clear playbook here where the Fed plans to cut another 25 at future meetings but will cut more if there's any deterioration.
