Fed Chair Powell says he does not think the different views on the FOMC makes his job more difficult, it is good to have a range of views.

Current Policy/Middle East

• There are tensions between the objectives of the Fed (with reference to the dual mandate).
• Risks to both sides of the mandate.
• Uncertainty on the outlook, as such, the dissenting/differing views are useful. At this point, the fact that there is no unanimity makes sense.
• Will get inflation back to target on a sustained basis.
• Policy is in a good place to wait and see how the situation plays out.
• Tendency to look through supply shocks, but, the Fed must be attentive to inflation expectations. Monitoring this carefully. Inflation expectations appear to be well anchored.
• Fed is not yet facing the question of what to do.
• Do not yet know what the economic effects of the current situation will turn out to be.

Tariffs

• Tariff inflation is likely a one-time increase, adding 0.5-1.0% to inflation.

Balance Sheet

• Research tends to find that purchasing long-term assets lowers rates and supports the economy, a view Powell shares.
• Have not really seen the downside risks to a large balance sheet that many had predicted. No sign that historic bond buying was inflationary.

Financial System

• The Fed has significantly hardened the system against losses of the type seen during the 2008 crisis.
• Should not attempt to regulate risk out of existence. Should always be vigilant.
• Never experienced a major financial cyber attack.
• The financial system is resilient.

Private Credit

• Private credit is a relatively small part of a large asset pool. Watching it carefully.
• Looking for things that could lead to contagion or significant losses.

Jobs

• When asked, he said in his advice to the students at Harvard, saying it is a time of very low job creation.
• Challenging time to enter the labour market, and may take some patience.

Outlook

• Very optimistic about the medium and long-term.
• Longer-term economic outlook will provide good opportunities.

AI

• AI is boosting productivity.