Press conference exchange between HOWARD SCHNEIDER and Fed Chair Jerome Powell:

user: Hi, Howard Schneider with Reuters. I’m sure there’s going to be tons of confusion out there about whether this means you’re going to slow in December or not. Would you say that the bias right now is not for another 75 basis point increase?

assistant: So, what I want to do is put that question of pace in the context of our broader tightening program, if I may, and talk about the statement language along the way. So I think you can think about our tightening program as really addressing three questions, the first of which was, and has been, how fast to go. The second is how high to raise our policy rate. And the third will be, eventually, how long to remain at a restrictive level. So on the first question—how fast to tighten policy—it’s been very important that we move expeditiously, and we have clearly done so. We’ve moved 3¾ percent since March, admittedly from a base of zero. It’s a historically fast pace, and that’s certainly appropriate given the persistence and strength in inflation and the low level from which we started. So now we come to the second question, which is how high to raise our policy rate. And we’re saying that we’d raise that rate to a level that’s sufficiently restrictive to bring inflation to our 2 percent target over time, and we put that into our postmeeting statement because that really does become the important question, we think now, is how far to go. And I’ll talk more about that. We think there’s some ground to cover before we meet that test, and that’s why we say that ongoing rate increases will be appropriate. And, as I mentioned, incoming data between the meetings, both a strong labor market report but particularly the CPI report, do suggest to me that we may ultimately move to higher levels than we thought at the time of the September meeting. That level is very uncertain, though, and I would say we’re going to find it over time. Of course, with the lags between policy and economic activity, there’s a lot of uncertainty, so we note that in determining the pace of future increases, we’ll take into account the cumulative tightening of monetary policy as well as the lags with which monetary policy affects economic activity and inflation. So I would say, as we come closer to that level, move more into restrictive territory, the question of speed becomes less important than the second and third questions. And that’s why I’ve said at the last two press conferences that at some point, it will become appropriate to slow the pace of increases. So that time is coming, and it may come as soon as the next meeting or the one after that. No decision has been made. It is likely we’ll have a discussion about this at the next meeting, a discussion. To be clear, let me say again that the question of when to moderate the pace of increases is now much less important than the question of how high to raise rates and how long to keep monetary policy restricted, which really will be our principal focus.

user: If I could follow up on that, to what degree was there an importance or weight given to a need to signal this possibility now, given all the concerns, really around the globe, about Fed policy driving ahead and everybody else dealing with their own stress as a result?

assistant: Well, I think I’m pleased that we have moved as fast as we have. I don’t think we’ve overtightened. I think there’s—very difficult to make a case that our current level is too tight, given that inflation still runs well above the federal funds rate. So I think that at this meeting, as in the last two meetings, as I’ve mentioned, I’ve said that we—that there would come a point, and this was a meeting at which we had a discussion about what that might mean. And we did discuss this, and, as I mentioned, we’ll discuss it again in December. But there’s no—I don’t have any sense that we’ve overtightened or moved too fast. I think it’s been good and a successful program that we’ve gotten this far this fast. Remember, though, that we still think there’s a need for ongoing rate increases, and we have some ground left to cover here, and cover it we will.