Thereafter, as the impact of COVID-19 subsides, the economy is expected to show higher growth. Turning to the outlook for prices, Chart 5 shows the medians of the Policy Board members’ forecasts presented in the January 2022 Outlook Report.
Monetary policy still faces considerable challenges as we seek to normalize policy. The task should be to return to a framework in which a market rate is our primary policy tool, to reduce the size of our balance sheet, and to restore our portfolio to all Treasuries.