and inflation are close to our objectives, monetary policy would look through a brief burst of inflation associated with commodity price shocks. however, the risk is rising that an extended period of high inflation could push longer - term expectations uncomfortably higher, which underscores the need for the committee to move expeditiously as i have described. - 10 conclusion the past two years have been extraordinarily challenging for many americans. two years ago, more than 20 million people were losing their jobs, millions were falling ill, and lives were being disrupted. we have made enormous strides since then. today, as i have discussed, the labor market is very strong. but, to end where i began, inflation is much too high. we have the necessary tools, and we will use them to restore price stability. figure 1. the unemployment rate has fallen sharply percent monthly total black hispanic source : bureau of labor statistics, employment situation, via haver analytics. figure 2. wage growth has surged particularly for low - wage workers trimmed mean wage growth by wage quartile average hourly earnings monthly percent change from year earlier all production workers weekly percent change from year earlier feb. 19 bottom bottom - middle top - middle 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022 source : bureau of labor statistics, employee hours, via haver analytics. top feb. may aug. nov. feb. may aug. nov. feb. note : quartiles defined by hourly wage distribution from base period of year - over - year calculation. wages are measured as hourly earnings, excluding tips, overtime, and other forms of compensation. source : federal reserve board staff calculations ; adp, inc. figure 3. labor demand has recovered but labor supply has not quarterly millions payroll employment plus job openings labor force 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 note : cps labor force data adjusted for effects of population controls. solid circles give january levels. source : for labor force, bureau of labor statistics, employment situation ; for payroll employment plus job openings, bureau of labor statistics, job openings and labor turnover survey, via haver analytics ; for both, federal reserve board staff calculations. figure 4. inflation has been rising, particularly for goods monthly percent change from year earlier monthly percent change from year earlier - 5 - 5 - 2 - 2 - 10 - 10 total pce inflation core pce inflation 1980 1986 1992 1998 2004 2010 2016 note : pce is personal consumption expenditures. source : bureau of economic

analysis, personal income and outlays, via haver analytics. core goods pce core services pce motor vehicles pce note : pce is personal consumption expenditures. source : bureau of economic analysis, personal income and outlays, via haver analytics. figure 5. fomc participants project a higher federal funds rate path 3. 0 annual percent march 2022 2. 5 3. 0 2. 5 december 2021 2. 0 2. 0 1. 5 1. 5 september 2021 1. 0 0. 5 1. 0 june 2021 0. 0 0. 5 0. 0 note : figure reports the median expectation of fomc participants for the federal funds rate at the end of the year indicated. source : summary of economic projections, available on the board ’ s website at https : / / www. federalreserve. gov / monetarypolicy / fomccalendars. htm. figure 6. three soft landings federal funds rate, percent monthly - 2 - 2 note : the shaded bars indicate periods of business recession as defined by the national bureau of economic research ( nber ) : december 1969 to november 1970, november 1973 to march 1975, january 1980 to july 1980, july 1981 to november 1982, july 1990 to march 1991, march 2001 to november 2001, december 2007 to june 2009, and february 2020 to april 2020. source : federal reseve board, statistical release h. 15, " selected interest rates ". figure 7. longer - run expectations remain wellanchored in their historical ranges 5. 0 monthly percent 5. 0 4. 5 4. 5 4. 0 4. 0 3. 5 3. 5 3. 0 3. 0 2. 5 2. 5 2. 0 2. 0 note : the series are medians of the survey responses about average inflation during the next 5 to 10 years. march data are preliminary. source : university of michigan surveys of consumers.