Press conference exchange between JEANNA SMIALEK and Fed Chair Jerome Powell:

user: Thanks for taking our questions, Chair Powell. And sorry for my tech issues. I wonder if you could tell us a little bit about where your thinking on inflation stands today. You know, the last time we saw an SEP back in September, we saw that you and your colleagues were projecting that inflation would sink back down quite close to target by the end of the year. And I wonder if you still think that projection from December is a reasonable one. And if your thinking has changed at all, I wonder how you’re thinking about that. And I also wonder if you could talk a little bit about the pathway to getting to that deceleration. Like, how do—how do we get from here, 7 percent CPI, to where you expect to be at the end of the year?

assistant: So I’d say, you know, since, since the December meeting, I would say that the inflation situation is about the same but probably slightly worse. I’d be inclined to raise my own estimate of 2022 core PCE inflation—let’s just go with that—by a few tenths today. But we’re not writing, writing down an SEP at this meeting. But I think it’s—it hasn’t gotten better. It’s probably gotten just a—just a bit worse, and that’s been the pattern. That’s been the pattern. So I think if you look at the—the FOMC participants are—there’s a range there. And that range has been moving to the right for, for a year now. And, by the way, if you look at other forecasters, essentially all other macro forecasters who do this for a living, you’ve seen the same pattern. So, what do we think about that? Well, I think we, you know, we wrote down rate increases in the December meetings, each of us individually. And I think to the extent the situation deteriorates further, our policy will have to address that, if it deteriorates meaningfully further, either in the time dimension or in the size of the inflation dimension. So that’s how we’re thinking about it. I—as I mentioned, though, I think it’s—part of this will be that us, the Fed, moving away from a very highly accommodative policy to a substantially less accommodative policy and then, over time, to a policy that’s not accommodative, in time. I don’t know when that will be. That’s—those are the things that we’re—that we’re thinking about. That’s, that’s part of it. Another part of it is that fiscal policy provided an impulse to growth over the last two years. That impulse will be less, in fact, will be—will be negative this year. And so that’s another thing. The other one is, we will eventually get relief on the supply side. And, you know, the ports will be cleared up. And there will be semiconductors and things like that. Now, what we’re learning is, it’s just taking much longer, so I think—longer than expected. And that, I think, does raise, raise the risk that high inflation will be more persistent. I do think we’ll come off of the highs that we saw in the early part of this episode in the—in the spring last year. But, really, what’s—the question is going to be, what is inflation running at? And so we’ll be watching that. And I, you know, we—our objective is to get inflation back down to 2 percent. It’s also to provide enough support to keep the labor market healthy. The labor market is very, very strong right now, and I think strength will continue. There’s a—there’s really a shortage of workers. We see it particularly among production and nonsupervisory workers and people in the lowest quartile. You see very large wage increases. I mentioned some of the other indicators. So I think that’s, that’s what we’re looking at. And we’re also—you know, we realize, I think, as everyone does, that this outlook is quite uncertain and that we’re going to have to adapt. And we’re going to communicate as clearly as we can. But we’re going to have to be adaptable and, you know, move, move as appropriate.