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

user: Thanks for taking our questions. Jeanna Smialek with the New York Times. You—I guess I wonder if you could describe for us a little bit how you’re deciding how aggressive you need to be. So, obviously, 75 today. What did 75 achieve that 50 wouldn’t have, and why not just go for a full percentage point at some point?

assistant: Sure. So if you take a step back, what we’re looking for is compelling evidence that inflationary pressures are abating and that inflation is moving back down. And we’d like to see that in the form of a series of declining monthly inflation readings— that’s what we’re looking for. And, by this point, we had actually been expecting to see clear signs of at least inflation flattening out and, ideally, beginning to decline. We’ve said that we’d be data dependent, focused on incoming data, highly attentive to inflation risks—the things that I mentioned to Howard moments ago. So contrary to expectations, inflation again surprised to the upside. Indicators—some indicators of inflation expectations have risen, and projections of inflation this year have moved up notably. So we thought that strong action was warranted at this meeting, and today we delivered that in the form of a 75 basis point rate hike, as I mentioned. So the point of it, really, is this: We’ve been moving rates up expeditiously to more normal levels, and over the course of the seven months since we pivoted and began moving in this direction, we’ve seen financial conditions tighten, and appropriately so. But the federal funds rate, even after this move, is at 1.6 percent. So, again, the Committee is moving rates up expeditiously to more normal levels, and we came to the view that we’d like to do a little more front-end loading on that. So I think that the SEP gives you the levels that people think are appropriate at given points in time. This was really about the speed in which we would get there. So, as I mentioned, 75 basis points today—I said the next meeting could well be about a decision between 50 and 75. That would put us, at the end of the July meeting, in that range—in that more normal range, and that’s a desirable place to be, because you begin to have more optionality there about the speed with which you would proceed going forward. Just talking about the SEP for a second: What it really says is that Committee participants widely would like to see policy at a modestly restricted—restrictive level at the end of this year. And that’s six months from now, and so much data can accrue and so much can happen, so remember how highly uncertain this is. But so that is generally a range of 3 to 3½ percent. That’s where people are, and that’s what they want to see, knowing what they know now and understanding that we need to be—we need to show resolve but also be flexible in responding to incoming data as we see it. If things are better, we don’t need to do that much, and if they’re not, then we either do that much or possibly even more. But in any case, it will be very data dependent. Then you’re looking at next year, and what you’re seeing is, people see more—a bit more tightening and a range of maybe 3½ to 4 percent. And that’s generally what people see as the appropriate path for getting inflation under control and starting back down and getting back down to 2 percent. So 75 basis points seemed like the right thing to do at this meeting, and that’s what we did.