Powell Q&A Begins

Q: First Q is on substantial further progress.
- A: Powell says that we appear to have achieved more than substantial further progress on inflation.

• On maximum employment, in many cases more than half of the distance between the unemployment rate in December of 2020 and typical estimates of a natural rate could be substantial further progress; many on FOMC feel that it has been met; others feel it's close; my own view is that it's all but met.

Q2: Inflation forecasts above target for 4 years, never gets lower than 2. Can you address for households, and for the new framework?

- A: Higher inflation forecasts in later years a reflection of bottlenecks and shortages have really not begun to abate in a meaningful way yet.

• That suggests inflation is going to be higher this year and I guess the inflation rates for next year and 2023 were also marked up, but just by a couple of tenths. They are modest overshoots.
• I don't think households are going to notice a couple of tenths of an overshoot. We want to foster a strong labor market and we want to foster inflation averaging 2% over time. I think we are very much on track to achieve those things. I see this is consistent with the frame work.