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Chair Powell Asked If Current Rates Are Not Yet Restrictive Given Data

FED
  • Q: What makes the FOMC think rates at this level are not yet restrictive given a more benign inflation forecast for this year, headwinds, etc?
    • A: I would characterize the situation a little bit differently. We held rates and said we're committed to achieving a stance of monetary policy to bring inflation down sustainably. The fact we decided to maintain the rate at this meeting does not mean we have or have not achieved that stance of mon pol that we are seeking.
    • SEP sees a majority believe it's more likely than not that we will raise rates one more time this year.
    • What we decided to do was hold rates and await further data. We want to see convincing evidence we've reached the appropriate level. We need to see more progress before we reach that conclusion.
    • We need policy to be restrictive so that we can get inflation down to target and we are going to need that to remain the case for some time.

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