Unfortunately, all economic projections are certain to turn out to be inaccurate in some respects, and possibly significantly so. Will the economic situation in Europe or China take a turn for the worse or exceed expectations? Will U.S. productivity growth pick up and allow stronger growth of gross domestic product (GDP) and incomes or instead continue to stagnate?
What will happen with the price of oil? The uncertainties are sizable, and progress toward our goals and, by implication, the appropriate stance of monetary policy will depend on how these uncertainties evolve.