Doing Their Job

The FOMC's statement today notes that inflation has been ebbing in recent months, but continues to highlight their concerns about inflation, and to indicate that they are ready to move interest rates higher if necessary. Then again, that's part of their job: to ensure that no one is silly enough to think that inflation could rise to an unacceptable level.

Recent indicators have suggested somewhat firmer economic growth, and some tentative signs of stabilization have appeared in the housing market. Overall, the economy seems likely to expand at a moderate pace over coming quarters.

Readings on core inflation have improved modestly in recent months, and inflation pressures seem likely to moderate over time. However, the high level of resource utilization has the potential to sustain inflation pressures.

The Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.

Of course, the other part of their job is to ensure steady job growth. I trust that they'll attend to that part of their job just as well, when the time comes.