00:00AI certainly feels transformative.
00:02When I talk to businesses, I hear genuine enthusiasm.
00:05But I also hear about cautious implementation.
00:09The big productivity effects, if they come, seem likely to mostly lie ahead of us.
00:15And we're living through this in real time.
00:18Distinguishing between these scenarios with confidence will likely take years and not months.
00:23And the wide range of possibilities definitely plays a role in how I'm thinking about monetary policy.
00:27Inflation has been above our 2% target for six years.
00:31And while we've made significant progress, inflation is still 2.8% and not 2%.
00:37Long-run inflation expectations are consistent with 2%, but they may be a little more fragile.
00:42And, of course, the conflict in the Middle East has created new risks to both inflation and to growth.
00:48The labor market is also very relevant for how I would evaluate a surge in growth that might or might
00:53not be driven by technological progress.
00:55If the unemployment rate is high, there's clearly more room to be patient.
00:59In a situation like today, though, where we are closer to full employment, the calculus is trickier.
01:05But trends in labor market momentum and wage growth can provide valuable signals about the extent to which a surge
01:11in growth is creating inflationary pressures.
01:13For example, I see no signs that the labor market is contributing to inflation pressures today.
01:20I take two lessons from the late 1990s.
01:23The first is that monetary policy credibility is valuable not just for fighting inflation, but also for allowing economic growth
01:30to flourish.
01:32The second lesson I take from this episode is that whatever happens, the low, medium, or high productivity scenario, or
01:38something else altogether, we are better able to calibrate monetary policy when we start from a good place.
01:44The third lesson I take from this episode of Mr. Quote Matt, I take over to the end of this
01:44decade, but for him to look, he is less likely to benefit the need for insects.
01:44The second one is that theí’Ť kind of log in a good spot, keep it in between the days.
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