My job as a policymaker is to work with my colleagues to identify the path of short-term interest rates that has the best chance of realizing that favorable central-tendency forecast of solid growth and continued low inflation. I do not know how much policy firming will be needed to accomplish this objective.
My forecast is that the economy is in transition to a sustainable pace of growth, in which case policy likely will be in transition as well. At this juncture, given the apparent strength in demand and the narrowing margin of unused resources, I am focused on making sure that inflation and inflation expectations remain well anchored.