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Powell: Less Progress Than Expected On Inflation Prompts Higher Unemployment Projection

FED
  • Q: Why a higher unemp projection? Is it because a higher terminal rate causes a higher unemp rate, or the labor market is not as strong?
  • A: It's not about the strength of the labor market, which is clearly very strong. It's more about, we made less progress than expected on inflation - that's why unemp goes up because we're having to tighten more. Slower progress on inflation, tighter policy, probably higher rates, probably held for longer just to get to kind of restriction that you need to get inflation down to 2%.

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