In her prepared remarks, Philadelphia Fed President Henry Paulson, a 2026 FOMC voting member, stated that the Fed's dual mandate (price stability and maximum employment) is the fundamental starting point for its monetary policy decisions. After more than five years of above-target inflation, restoring inflation to the 2% target level is crucial. Against this backdrop, she supported the FOMC's decision last week to keep interest rates unchanged. Recent improvements in some inflation data are encouraging. This is a step in the right direction, but only a first step. More information will be gathered to better understand the underlying inflation situation and the impact of supply shocks such as energy and tariffs. At the same time, an open mind will be maintained regarding the outlook for monetary policy.
