While the risk to the inflation target was on the downside in the short term, the broader economic justification for a more bearish stance remains evident over the longer two-year time horizon.
Policy is supposed to be forward-looking.
At the same time, it should be recognised that some softer data have emerged recently relating to domestic demand. Of course, neither of these data makes any statement regarding spending on services, and even within goods the official data have a wider coverage of retailers. Don't count on it. For starters, the non-partisan Congressional Budget Office has already weighed in with its verdict on the credibility of the Clinton plan. In response, the Republicans have urged the Clinton Administration to go back to the drawing board.