Clarida Sees Fed Rate Liftoff in 2023

The transcript discusses the projected core PCE inflation, highlighting that if it exceeds 3%, it would be more than a moderate overshoot of the 2% goal. It addresses the risks to the inflation outlook, particularly the potential for an upside. The FOMC's outcome-based threshold guidance is explained, which includes conditions for increasing the federal funds rate. These conditions involve labor market conditions, inflation reaching 2%, and being on track to exceed it. The transcript concludes with the belief that these conditions might be met by the end of 2022.

What inflation rate does the speaker consider as an overshoot of the 2% longer run goal?

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What are the three conditions specified by the FOMC before considering an increase in the target range for the federal funds rate?

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What did Chair Powell indicate about the timeline for considering raising interest rates?

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What does the speaker indicate about the current status of raising interest rates?

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According to the speaker, what must happen to the outlook for inflation and unemployment for the necessary conditions to be met by year end?

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