Esther George, Interview: Bloomberg TV

Inflation

“So the direction, I think, is a good one. Inflation is still well above the Fed’s target, and so to be true to that price stability mandate, it looks like we’ll have to be a little more patient to see if we’re on the right trend, and going to be there more convincingly to that 2% target.”

Monetary Policy Lags

“So there are lags with this policy instrument. It transmits pretty quickly to financial conditions, and of course we’ve seen that, but we also know that there’s lags. So it’s in the pipeline coming. It’s one of the reasons that last month I supported that downshift to a 50 basis point increase, because I think it will be important to begin to watch very carefully what signs are we seeing in the data.”

Fed Funds

“And so you want to make sure that as you start off on that path of tightening, that you’re communicating well, and that you are not going to be more disruptive with that. I think we’re in a good place today, again, being very clear about the commitment to getting back to 2%. Some of this aggressive tightening, but we are reaching a point I think where it will be important to start looking around corners, listening more carefully for where some of those shifts are going to take place.”