00:00The elevated levels of inflation, mixed signals from the labor market, and heightened uncertainty
00:05from the Middle East conflict present an unusual set of circumstances, but the current stance
00:11of monetary policy is well positioned to balance the risks to our maximum employment and price
00:15stability goals. Accordingly, at its meeting last week, the FOMC decided to maintain the
00:20target range for the federal funds rate at 3.5 to 3.75%. Looking ahead, my base case is for
00:26inflation to be about 3% this year before dropping to our 2% target in 2027 as the effects
00:33of tariffs and energy prices move into the rearview mirror. I anticipate real GDP growth
00:39to be between 2.25% this year next. Consequently, with growth around its trend pace, I expect
00:47the unemployment rate will remain its recent range of 4.25% to 4.5%.
00:51Now, right now, the future is difficult to see, and the risk to both of our mandate goals
00:57has increased. The extent and duration of the effects of supply disruptions and higher energy
01:03prices emanating from the Middle East conflict are key factors that will shape the global
01:08economic outlook. We simply can't know how this will play out. Market expectations for
01:14the future path of oil prices are fairly benign, but several plausible scenarios entail more severe
01:20dislocations in both prices and in quantities.
01:23Dazuitives
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