Harker: Right Now, It’s Putting One Foot in Front of the Other

Takeaways: 1. As we begin the new year, “the economy is in a good place overall.” “Inflation is down significantly from its 2022 peak,” and data continue to point to a gradual, if uneven, trajectory back to the Fed’s 2 percent target. This has been accomplished with a labor market that has stayed healthy “as unsustainably hot job-market conditions from two years ago cooled in an orderly way.” 2. By describing the economy as in a good place overall, Collins is not declaring victory – and in fact sees “considerable uncertainty accompanying my baseline outlook.” “While inflation is down significantly, it is still above target; and its decline has been slower and bumpier” than anticipated. Collins described multiple types of uncertainty – including “noisy” measurement of key economic variables, unusual features of the post-pandemic economy, and possible future policy changes and geopolitical developments. post: BOSTON FED'S COLLINS/NAIOP: LESS WORRIED NOW ABOUT JOBS MKT FRAGILITY; BROADLY AGREE WITH S.E.P. OUTLOOK ON TWO 2025 RATE CUTS #Collins #FederalReserve #economy post: BOSTON FED'S COLLINS/NAIOP: RESTRICTIVE POLICY STANCE STILL NEEDED; 2025 INFLATION TO RUN 'SOMEWHAT HIGHER' THAN ORIGINALLY THOUGHT #Collins #FederalReserve #economy post: BOSTON FED'S COLLINS/NAIOP: 'NO PRESET PATH' FOR POLICY; FED WELL POSITIONED TO ADJUST TO WHATEVER NEEDS TO BE DONE; NEED 'GRADUALISM' #Collins #FederalReserve #economy

It has been a little over a year since I joined the Monetary Policy Committee (MPC). Lots has happened over that period. I’m going to use this speech to review what we have learned and where that leaves my view of the outlook for the economy and for monetary policy. In doing that, I will aim to explain how important it is for us to keep asking ourselves which shocks could be hitting the economy and what implications those different shocks would have for medium-term inflation. We are always reading between the lines. Before I get into the meat of the speech, I wanted to thank you for inviting me to come to speak to you today. I can think of few better places to come to talk about the economy than one of the homes of Adam Smith, the father of the discipline – I just can’t promise to be as insightful and groundbreaking as he was in his d post: BOE BREEDEN: RECENT EVIDENCE FURTHER SUPPORTS THE CASE TO WITHDRAW POLICY RESTRICTIVENESS. post: BOE'S BREEDEN: I EXPECT THE BANK RATE TO COME DOWN OVER TIME. post: BOE BREEDEN: IT IS DIFFICULT TO KNOW HOW QUICKLY TO REMOVE THE RESTRICTIVE POLICY. post: BOE'S BREEDEN: UPSIDE CPI SCENARIOS ARE NO LONGER CORE CONSIDERATION.