In his prepared remarks, 2026 FOMC voting member and Philadelphia Fed President Henry Paulson mentioned two possible scenarios regarding the impact of current monetary policy on inflation. One scenario is that current policy measures are somewhat restrictive, which will bring the inflation rate back to 2% within an acceptable timeframe. The other possibility is that the current policy力度 is insufficient to achieve the 2% inflation target; the strongest evidence supporting this view is that inflation has been consistently above the target for more than five years.
How do we determine which scenario we are in? We can make this judgment by observing the accumulation of relevant data. If policy adjustments are appropriate, there will be signs of a gradual decline in inflation: more months of inflation data will show an improving trend; feedback from those responsible for pricing and hiring decisions will indicate that the inflation rate is gradually returning to 2%; pressures from tariffs, energy, and artificial intelligence will be controlled, not exacerbated; and inflation expectations will remain stable, consistent with the 2% target. However, if the underlying inflation rate remains high without any progress over time, it indicates that more stringent policy measures may be needed.
I will maintain an open mind when assessing the evidence and determining the appropriate policy direction. My primary task is to achieve a 2% inflation rate while maintaining full employment.
