Central banks: Our latest calls

It is a pleasure to participate in this policy panel at the International Research Forum on Monetary Policy sponsored by the Euro Area Business Cycle Network, the European Central Bank, and the Federal Reserve Board. The Federal Open Market Committee (FOMC) met last week; so in my brief prepared remarks, I will review the FOMC’s recent decisions and put them into context. As a reminder, the views I present today will be my own and not necessarily those of the Federal Reserve System or of my colleagues on the Federal Open Market Committee. In making its monetary policy decisions, the FOMC is always guided by its strong commitment to achieving its goals of price stability and maximum employment. At the start of the pandemic in March 2020, the FOMC reduced the target range of its policy rate, the federal funds rate, to 0 to 1/4 percent, to support the economy in the wake of the unprecedented COVID shock. The FOMC also used its balance sheet as a policy tool, buying large quantities of Treasury securities and agency mortgage-backed tweet at 12:00pm: Fed’s Mester: Appropriate To Raise Policy Rate Another 50Bps At Each Of Next Two Meetings (Jun & Jul) - In Sept, FOMC Better Positioned To Consider The Appropriate Pace To Continue Removing Accommodation Over The Balance Of The Year tweet at 12:01pm: Fed’s Mester: Positive Signs From March: Core PCE Price Index, Cleveland Fed’s Median PCE Inflation - But Risks To Inflation Remain Strongly On The Upside - Current Pace Of Wage Increases Inconsistent With Maintaining Price Stability