00:00From my perspective, monetary policy has been and continues to be what we call restrictive.
00:07Monetary policy is still in a position today that is putting hopefully downward pressure on inflation,
00:13keeping the economy, trying to keep the economy in balance and bring inflation down from the 7% we saw a few years ago
00:20back down all the way to the 2% longer run goal we have.
00:24Today, inflation in the U.S. by the measure that we follow and target is 2.7%.
00:29So we still have a ways to go to get to that 2% goal.
00:32We've moved a long ways towards that.
00:34But that's why we've had monetary policy somewhat higher interest rates than normal
00:38in order to keep pushing down inflation gradually over time.
00:42But at the same time, not doing undue harm to our other goal, which is maximum employment, the labor market and jobs.
00:48So your question is really getting at that.
00:50We have a balancing act here that inflation has been coming down.
00:55I think the underlying inflation continues to move down.
00:58But then we've had the effects of relatively modest or moderate effects of tariffs.
01:04They're boosted prices in some, especially in imported goods.
01:07So that's pushing inflation up a little bit.
01:10At the same time, we've seen a labor market that's been remarkably resilient has been gradually softening over the past year.
01:18We've seen the unemployment rate tick up since some other measures move kind of to signs that the labor market is softening.
01:25We don't want to – I don't want to see that go too far.
01:27So when you have two goals, maximum employment and priceability, kind of the data are somewhat moving away from our kind of – I think, you know, the desired levels.
01:36So we have to do a balancing act.
01:38Policy is restrictive.
01:39Maybe, in my view, is given the risks to the employment goal, we're getting a little higher.
01:46The labor market indicators are softening somewhat.
01:50At the same time, some of the upside risks to inflation, in my view, have come down.
01:55The tariff effects have been smaller than most people thought.
01:58And there doesn't seem to be any signs of inflationary pressures building.
02:02So with this kind of rebalancing of the risks from one where inflation was the big risk to one where employment and inflation, the risks to them have moved closer together,
02:11it made sense to move interest rates down a little bit to get them to take a little bit of the restrictiveness out of there.
02:18I still see monetary policy as putting downward pressure on inflation, but just a touch less.
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