While predicting the future is difficult, with available data it appears that in 2018 and in the first quarter of 2019, the supply side of the economy— employment, participation, and productivity—expanded faster than most forecasters outside and inside the Fed expected. Notwithstanding robust growth in demand over these five quarters, PCE price inflation fell somewhat short of the Fed’s 2 percent objective.
With this background, let me now turn to the outlook for U.S. monetary policy. Monetary Policy As I mentioned earlier, my colleagues and I on the FOMC understand that our priority today is to put in place policies that will help sustain maximum employment and price stability in an economy that appears to be operating close to both of our dualmandate objectives.