Christopher Waller, Speech: The Economic Outlook and a Cautionary Tale on “Idiosyncratic” Price Changes and Inflation

“Based on my outlook for the economy, however, I do not expect liftoff to occur soon after tapering is completed. The two policy actions are distinct. I believe the pace of continued improvement in the labor market will be gradual, and I expect inflation will moderate, which means liftoff is still some time off.”

“That said, as I mentioned earlier, if my upside risk for inflation comes to pass, with inflation considerably above 2 percent well into 2022, then I will favor liftoff sooner than I now anticipate. A major consideration will be my judgment about whether inflation expectations are at risk of becoming “unanchored”—rising substantially and persistently above 2 percent. My FOMC colleagues and I will be watching all of the data carefully in the coming weeks and months and will adjust policy as needed to help ensure the U.S. economy continues to recover from the effects of COVID, and that we continue to make progress toward our economic goals.”