Press conference exchange between CHRISTOPHER RUGABER and Fed Chair Jerome Powell:

user: Thank you. Chris Rugaber at Associated Press. Just to go back to housing for a minute: You mentioned the impact that rate increases have had on housing—home sales are down 25 percent in the past year, and so forth—but none of this is really showing up in, as you know, in the government’s inflation measures. And as we go forward, private real-time data is clearly showing these hits to housing. Are you going to need to put a greater weight on that in order to ascertain things like whether there’s overtightening going on, or will you still focus as much on the more lagging government indicators?

assistant: So this is an interesting subject. So I start by saying, I guess, that the measure that’s in the CPI and the PCE, it captures rents for all tenants, not just new leases. And that makes sense, actually, because for that reason—conceptually, that is—that’s the right target for monetary policy. And the same thing is true for owners’ equivalent rent, which comes off of—it’s a reweighting of tenant rents. The private measures are, of course, good at picking up, at the margin, the new leases, and they tell you a couple things. One thing is, I think right now, if you look at the pattern of that series of the new leases, it’s very pro-cyclical, so rents went up much more than the CPI and PCE rents did. And now they’re coming down faster. But what you’re—the implication is that there are still, as people, as non-new leases roll over and expire, right, they’re still in the pipeline, there’s still some significant rate increases coming, okay? But at some point, once you get through that, the new leases are going to tell you—what they’re telling you is, there will come a point at which rent inflation will start to come down. But that point is well out from where we are now. So we’re well aware of that, of course, and we look at it. But I would say that in terms of—the right way to think about inflation, really, is to look at the measure that we do look at, but considering that we also know that at some point, you’ll see rents coming down.

user: Great, and just a quick follow. It looks like stock and bond markets are reacting positively to your announcement so far. Is that something you wanted to see? Is that a problem or what—how that might affect your future policy to see this positive reaction?

assistant: We’re not targeting any one or two particular things. Our message should be—what I’m trying to do is make sure that our message is clear, which is that we think we have a ways to go, we have some ground to cover with interest rates before we get to, before we get to that level of interest rates that we think is sufficiently restrictive. And putting that in the statement and identifying that as a goal is an important step. And that’s meant to put that question, really, as the important one now, going forward. I’ve also said that we think that the level of rates that we estimated in September—the incoming data suggests ’s actually going to be higher, and that’s been the pattern. I mean, I would have little confidence that the forecast—if we made a forecast today, if we were doing an SEP today, the pattern has been that, one after another, they go up, and that’ll end when it ends, but there’s no sense that inflation is coming down. If you look at the—I have a table of the last 12 months of 12-month readings, and there’s really no pattern there. We’re exactly where we were a year ago. So I would also say, it’s premature to discuss pausing. And it’s not something that we’re thinking about. That’s really not a conversation to be had now. We have a ways to go. And the last thing I’ll say is that I would want people to understand our commitment to getting this done and to not making the mistake of not doing enough or the mistake of withdrawing our strong policy and doing that too soon. So those—I control those messages, and that’s my job.