Fed's Miran (voter) says it is too soon to have a firm view on the Middle East conflicts inflationary impact. Evidence that oil prices feed into core inflation is limited.

Geopolitics

• The Middle East is different to Ukraine, as at that point both monetary and fiscal policy were more expansionary.
• Markets do not appear to be concerned about the long-term inflation implications, with reference to the Middle East.

Jobs market

• There is labour market slack, i.e. youth unemployment.
• A two-year trend of the labour market weakening, it is premature to reject that on a month or two's worth of data.

Inflation

• If housing inflation decelerates as forecast, the Fed could undershoot its 2% target.

Monetary Policy

• 100bps of easing in 2026 would be appropriate (reiteration).
• Delivered by 25bps cuts until neutral, then evaluate (reiteration).
• Appropriate to cut in March, the outlook has not changed due to the Middle East.

AI

• Block layoffs are indicative of what could occur, but it is only one firm. (Block announced 4k layoffs, of a 10k workforce)
• Too soon to make an assessment on the outlook for the economy from AI developments.
• AI job transition should be accommodated via easier policy.

Credit Situation

• Issues do not warrant a change in monetary policy.