Fed Vice Chair Lael Brainard said yesterday that “monetary policy will need to be restrictive for some time to provide confidence that inflation is moving down” to 2% target. She added Fed will need “several months of low monthly inflation readings to be confident that inflation is moving back down to 2%.”
“Our resolve is firm,” Brainard said. “If history is any guide, it is important to avoid the risk of pulling back too soon,” and easing interest rates before inflation is under control.
Boston Fed President Susan Collins said, “It’s really premature right now to be too specific about exactly what the right policy move will be in September… I will reiterate that we need to do more, we’ve not yet seen significant declines in prices, and that’s what we’re going to be looking for.”
