market, which improved over 2023, stops improving or reverses ; and that the gains on moderating inflation evaporate. one piece of data i will be watching closely is the scheduled revisions to cpi inflation due next month. recall that a year ago, when it looked like inflation was coming down quickly, the annual update to the seasonal factors erased those gains. in mid - february, we will get the january cpi report and revisions for 2023, potentially changing the picture on inflation. my hope is that the revisions confirm the progress we have seen, but good policy is based on data and not hope. when the time is right to begin lowering rates, i believe it can and should be lowered methodically and carefully. in many previous cycles, which began after shocks to the economy either threatened or caused a recession, the fomc cut rates reactively and did so quickly and often by large amounts. this cycle, however, with economic activity and labor markets in good shape and inflation coming down gradually to 2 percent, i see no reason to move as quickly or cut as rapidly as in the past. the healthy state of the economy provides the flexibility to lower the ( nominal ) policy rate to keep the real policy rate at an appropriate level of tightness. but i will end by repeating that the timing and number of rate cuts will be driven by the incoming data. thank you. 1 see christopher j. waller ( 2023 ), " something's got to give, " speech delivered at the distinguished speaker seminar, european economics and financial center, london, october 18, and " something appears to be giving, " speech delivered at the american enterprise institute, washington, d. c., november 28. the views expressed here are my own and not necessarily those of my colleagues on the federal open market committee. 2 see christopher j. waller ( 2022 ), " responding to high inflation, with some thoughts on a soft landing, " speech delivered at the institute for monetary and financial stability ( imfs ) distinguished lecture, goethe university frankfurt, germany, may 30. 3 see figura and waller ( 2022 ). " what does the beveridge curve tell us about the likelihood of a soft landing?, " feds notes. washington : board of governors of the federal reserve system, july 29, 2022. 4 for example, the movement of goldman sachs'financial conditions index looks a lot like that of the 10 - year treasury yield and is close to its levels

monthly core pce reading will be 0. 2 percent. if those forecasts hold true, then core pce inflation in december will remain close to 2 percent, when measured on a 3 - month or 6 - month basis. pce inflation of 2 percent is our goal, but that goal cannot be achieved for just a moment in time. it must be sustained at a level of 2 percent. as i said earlier, based on economic activity and the cooling of the labor market, i am becoming more confident that we are within striking distance of achieving a sustainable level of 2 percent pce inflation. i think we are close, but i will need more information in the coming months confirming or ( conceivably ) challenging the notion that inflation is moving down sustainably toward our inflation goal. this brings me to the implications for monetary policy. the progress i have noted on inflation, combined with the data in hand on economic and financial conditions and my outlook has made me more confident than i have been since 2021 that inflation is on a path to 2 percent. while the emphasis of policy since that time has been on pushing down inflation, given the strength of the current labor market the fomc's focus now is likely to be more balanced : keeping inflation on a 2 percent path while also keeping employment near its maximum level. today, i view the risks to our employment and inflation mandates as being more closely balanced. i will be watching for sustained progress on inflation and modest cooling in the labor market that does not harm the economy. i believe policy is set properly. it is restrictive and should continue to put downward pressure on demand to allow us to continue to see moderate inflation readings. so, as i said, i believe we are on the right track to achieve 2 percent inflation. 4 / 6 bis - central bankers'speeches as long as inflation doesn't rebound and stay elevated, i believe the fomc will be able to lower the target range for the federal funds rate this year. this view is consistent with the fomc's economic projections in december, in which the median projection was three 25 - basis - point cuts in 2024. clearly, the timing of cuts and the actual number of cuts in 2024 will depend on the incoming data. risks that would delay or dampen my expectation for cuts this year are that economic activity that seems to have moderated in the fourth quarter of 2023 does not play out ; that the balance of supply and demand in the labor