The Fed is committed to achieving a policy stance that will bring inflation sustainably down to 2% over time. With the fast pace of the tightening, more meaningful tightening could be in the pipeline, driven by new or existing uncertainties. Decisions on the extent of additional policy firming and how long the policy will last, remain situation-based. Key influencers include the totality of incoming data, evolving outlook, and the balance of risk.
Jerome Powell on bringing inflation down to 2% The Fed remains resolute to returning inflation to 2% over time, but acknowledging the range of uncertainties that could complicate its task of balancing the risk of tightening monetary policy too much, against the risk of tightening too little. For too little, it could allow above target inflation to become entrenched and ultimately require monetary policy to ring more persistent inflation from the economy.