Based on my forecast for the economy, I expect monetary policy to be restrictive until there has been a sustained reduction in core personal consumption expenditure (PCE) inflation, which excludes food and energy. Food and energy prices tend to be volatile, so focusing on core PCE inflation is a good guide to inflation pressures in the near and medium term.
Importantly, as futures prices for commodities—food, energy, raw materials—have declined recently, I am expecting total PCE inflation to decline in coming months. But until I see a significant moderation in core prices, I support further rate hikes. In talking about where monetary policy is headed, it is helpful to get a fix on where it is right now.