- The Federal Reserve raised its benchmark rate by a quarter percentage point to a 3.75%-4% target range and pointed to another hike this year.
- Kevin Warsh said the plain fact is inflation is too high and has been for too long, and he would be hard-pressed to call broad financial conditions restrictive.
- Warsh said the Fed does not need to harm the labor market to achieve its 2% inflation objective, calling the unemployment rate consistent with full employment.
- The Summary of Economic Projections shows a median path of 2.3% real GDP growth this year and 2.4% next year, total PCE inflation at 3.7% this year falling to 2.3% next year, and a median appropriate policy rate of 4.1% at year-end.
- UBS economist Jonathan Pingle called Warsh's inflation language stronger than markets expected, while Warsh said inflation risks skew to the upside and labor risks are roughly balanced.
Quotes
“the plain fact is that inflation is too high and has been for too long”
“I don't believe that we need to do harm to the labor markets to achieve our objective”
“removed a dose of accommodation”
“inflation risks skew to the upside while labor risks are roughly balanced”
“much stronger wording than the market expected”