Federal Reserve press conference, 2022-03-16 — Chair Jerome Powell

Question (Howard Schneider, Reuters): Hi, Chair Powell. I was wondering, in the SEPs, you have quite a markdown to GDP from 4 to 2.8 percent. I’m wondering, how much of that do you feel is the result of the Fed’s stiffer-than-expected action here? You talk about monetary policy operating with a lag, but is this going to bite quicker than expected?
Answer: I don’t think that’s a big piece of it, actually. I think some of that is just an early assessment of the effects of spillovers from the war in Eastern Europe, which will hit our economy through a number of channels. Highly uncertain, but, you know, you’re looking at higher oil prices, higher commodity prices. It’ll be—we think that will weigh on GDP to some extent. So that’s part of what moved those assessments down. I don’t think—I mean, I think, generally, monetary policy works with a lag, so some of that would also be in there. But remember, as well, that 2.8 percent is still very strong growth. If we think that the potential growth rate of the economy is somewhere between, somewhere around 1.75 percent, 2.8 percent is strong economic growth. It would have been one of the strongest years, in fact, of the last expansion. So, while it’s lower than last year’s 5.8 percent, it’s still quite strong growth. So I would say it’s quite a strong forecast.

Question (Edward Lawrence, Fox Business): —the impact that—given you’re not actually confirmed and Governor Brainard is not actually confirmed, has there been any impact on your job or the Fed’s ability to handle inflation?
Answer: None whatsoever.