00:00The non-traditional data on economic activity are consistent with the overall assessment that we might be seeing some moderation in economic growth, but not yet a significant slowdown.
00:13As policies on fiscal matters and immigration take shape, I find that important to also account for the implications for the U.S. economic outlook.
00:23On the fiscal side, the omnibus bill passed by the House would add stimulus to the economy.
00:31On the immigration side, we have seen inflows substantially down since last year, which decreases labor supply and could add meaningful upward pressure to inflation by the end of the year in sectors that are reliant on immigrant labor, such as agriculture, construction, food processing, health, and leisure and hospitality.
00:56That said, I have to say, I have not yet seen much of an imprint on wages from these developments yet.
01:06Let me conclude with the implications of all these for monetary policy.
01:11As inflation has declined over the past two years, still in part to tighter monetary policy, the U.S. economy has remained resilient, with the stable labor markets and employment near its maximum sustainable level.
01:29This inflation has slowed, and we're already seeing the effects of higher tariffs, which I expect will continue to increase inflation over 2025.
01:40I see greater upside risks to inflation at this juncture and potential downside risks to employment and output growth down the road.
01:52And this leads me to continue to support maintaining the FOMC's policy rate at this current setting if upside risks to inflation remain.
02:01I view our current stance of monetary policy as well positioned for any changes in the macroeconomic environment moving forward.
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