Returning to Price Stability: An Update on the Economy and Monetary Policy

Abstract: The FOMC’s job continues to be to assess the implications of economic and financial developments for the outlook and risks around the outlook and, given that assessment, to calibrate monetary policy so that inflation returns sustainably to our 2 percent goal and labor markets remain healthy. The actual path monetary policy takes will depend on how the economy actually evolves; this is the data dependence policymakers often refer to. Our current monetary policy stance puts us in a good position for managing the risks that could be realized. Moving rates down too soon or too quickly without sufficient evidence to give us confidence that inflation is on a sustainable and timely path back to 2 percent would risk undoing the progress we have made on inflation. And with labor markets and economic growth both being very solid, we do not need to take that risk.

Keywords: inflation; monetary policy; economic outlook;

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Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Speech

Publication Date: 2024-05-16