On April 21, the Federal Reserve’s Mester stated that the substantial tightening of monetary policy last year has resulted in a better balance between demand and supply in the product and labor markets, and we have also made gratifying progress in reducing inflation.
This is good news. But inflation remains too high.
Given that the effects of some rate hikes and tightening financial conditions have not yet been felt in the economy, we need to carefully assess all incoming economic and financial information when determining the appropriate path for monetary policy going forward.
We are currently closer to the end of the austerity process than to the beginning.
Price stability is critical to the long-term health of the labor market and the stability of the overall economy and financial system. Therefore, it would be a mistake to declare victory now.
What I want to say is that not continuing to fight inflation now will only make subsequent efforts more difficult and bring greater risks to the economy.