Workers, jobs, growth and inflation—Today and tomorrow

Thank you, Alex for that kind introduction. And thank you to the Commonwealth Club World Affairs of California and the San Francisco Press Club for hosting this event. I’m really looking forward to a lively discussion. Now, the last time I was here, the world looked considerably different. It was November 2021, and we were still struggling to come out of the pandemic. Inflation was high, the labor market was rebounding, and the federal funds rate, the Federal Reserve’s primary interest rate tool, was near zero. Things have clearly changed. The federal funds rate is now above 5 percent, inflation has receded, although not completely, and the labor market has more than recovered and is now slowly moving towards a more sustainable level. That’s a lot of improvement and we should acknowledge it. But we are not there yet. So, we must continue the work of fully restoring price stability without a painful disruption to the economy. Today, I will review where we stand and discuss what it will take to finish the job. As always, the views I will express are my own and post: DALY: IF INFLATION FALLS MORE SLOWLY THAN EXPECTED, POLICY RATE MUST STAY HIGHER FOR LONGER DALY: IF INFLATION FALLS RAPIDLY OR LABOR MKT SOFTENS MORE THAN EXPECTED, LOWERING POLICY RATE WOULD BE NECESSARY post: DALY: BUMPINESS OF INFLATION DATA SO FAR THIS YEAR HAS NOT INSPIRED CONFIDENCE post: FED'S DALY: INFLATION IS NOT THE ONLY RISK. post: FED'S DALY: IF THERE ARE GRADUAL DECLINES IN INFLATION AND SLOW LABOR MARKET REBALANCING, THEN THE FED CAN NORMALIZE POLICY OVER TIME.

post: Fed’s Daly: Must Be Mindful Of Not Loosening Policy Too Early Or Holding Too Long post: FED'S DALY: FROM CONTACTS, CONCERNS NOW ARE THE ONES WE HAD IN 2019 post: FED'S DALY: INITIAL CLAIMS FOR UNEMPLOYMENT INSURANCE STILL COMING IN LOW