Chair Powell On Inflation Expectations

Q: Was there something you saw in inflation expectations?

• A: We look at a broad range of inflation expectations, surveys of the public, experts, and market-based. What you see is expectations are still in the place where short-term inflation is going to be high but comes down sharply over the next couple of years, as you get away from this episode, and get back down to 2%. That's important to us.
• The prelim Michigan reading was quite eye-catching and the index of common infl expectations has moved up after being flat for a long time. One of the factors in moving 75 was what we saw in inflation expectations; determined to anchor in 2%.
• [If saw another uptick in infl expectations, would you go 75 or 100 at next meeting?] We will react to incoming data. We think policy has to be restrictive, we don't know how restrictive.