00:00There's sort of downside risk to the labor market, which suggests keep rates low,
00:04but there's upside risk to inflation, which suggests maybe don't keep rates low.
00:08You've got tension between the two objectives.
00:10The tariff inflation is visible, and we think it's really just a one-time price increase.
00:15That's been our thinking since the beginning.
00:17Right now, we think it's adding somewhere between a half and a full percentage point to inflation,
00:22but that's a much smaller thing than we saw during the pandemic inflation.
00:26And, of course, now we're facing events in the Middle East, which will certainly affect gas prices,
00:34and we feel like our policy is in a good place for us to wait and see how that turns
00:39out.
00:39Inflation expectations do appear to be well anchored beyond the short term,
00:43but nonetheless, it's something as we will eventually maybe face the question of what to do here.
00:49We're not really facing it yet because we don't know what the economic effects will be.
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