Fed's Paulson: Underlying inflation is too high
Anna Paulson, President of the Federal Reserve (Fed) Bank of Philadelphia, said in an interview with CNBC on Tuesday that underlying inflation remains too high and that monetary policy needs to stay mildly restrictive, adding that the current environment likely meets that description.
Key takeaways:
Underlying inflation is too high.
Committed to getting inflation back to target.
This is a complicated time for monetary policy.
Data suggests Fed policy is 'mildly restrictive'.
Need mildly restrictive monetary policy and Fed likely has that now.
Committed to having an 'open mind' about the monetary policy outlook.
Was not a close call to keep rates steady at the FOMC.
If policy is in the right place, inflation will ease.
If monetary policy is not restrictive enough, data will show sticky, high inflation.
If progress is not made on inflation, the Fed will need to act.
Job market is stable right now.
Energy prices are volatile, data suggests it can be looked through.
It is right to look through supply shocks.
Uncertainty of the current environment makes it hard to provide forward guidance.
It's great to take a fresh look at how the Fed does its work."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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