Summary on interest rates
“With domestically-generated inflation building and the prospect of excess demand in the economy emerging, a modest tightening of monetary policy is now appropriate to return inflation to its 2 percent target, and to keep it there.”
“Gradual tightening of monetary policy is likely to be required in order to return inflation sustainably to its target at a conventional horizon.
“Structural factors that have pushed down the trend equilibrium real rate are likely to persist.
“Domestic short-term factors (particularly headwinds from uncertainty and fiscal drag) will fade slowly.
“R* expected to rise gradually. Policy needs to walk – not run- to stand still”.
