Alberto Musalem

I don't hear that from companies.

Companies often are more concerned about non-interest costs that are increasing.

For example, I mentioned insurance, but raw material costs and other costs.

to produce things all the way from building homes to producing manufactured goods.

And so I hear more about that than about interest costs being something that needs to be passed on to consumers.

So it's very important that we continue to focus on bringing inflation back down towards 2%.

As Chair Powell said, there's no risk-free path.

And, you know, if we focus too much on the labor market and then cut too aggressively, we're going to have an undesired outcome on the inflation side.

If we focus too much on the inflation side and labor market deteriorates, we're going to have an undesired outcome.

And so right now what our strategy is,

monetary policy strategy document says is that when you have some tension between your two goals, you have to follow a balanced approach, which is to steer monetary policy to attend to both goals.

Well, which way would you steer it in December based on what you know now?

I think, again, it's very important that we tread with caution here.

I think there is limited room to ease policy further without policy becoming overly accommodative.

Monetary policy, in my estimation, is somewhere between modestly restrictive and neutral.

closer to neutral.

If you look at the real federal funds rate, it now is around 1%, and 1% happens to be the long-run neutral rate in real terms for the federal funds rate of the entire committee, the median, I should say, of the entire committee.

So, I think we need to continue to lean against inflation to make sure we bring inflation back down towards our 2% target while providing some insurance to the labor market.

One thing I hear often when I visit with folks in my district is that...

People are having more month than money, increasingly, number one.