Alberto Musalem

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.

Number two, I hear that folks are increasingly going to food pantries, including middle income folks.

And I hear that aid institutions are increasingly getting requests

for utility assistance, probably related to higher electricity and energy prices.

I should say electricity prices.

So those three things tell me that it's really important that we bring inflation back towards 2% to allow households to catch up with their real incomes.

Financial conditions are very accommodative of economic activity and of employment conditions.

The Fed, the board, just released this financial stability report where it says that asset valuations are notable.

And it's not our job to opine on particular valuations of markets.