I met with government officials to discuss the Commonwealth’s economic plan and pandemic recovery. I also heard from executives about how the banking sector is faring. And I met with leaders of cooperativas to hear about what they're doing to help residents improve their access to credit and financial services. I took a short flight here from San Juan after a full day of engagements yesterday, and I spent the earlier part of this morning at the Aeronautical and Aerospace Institute of Puerto Rico, where I learned about this growing industry. Needless to say, the views from the ground and the air have been delightful. The U.S. economy has experienced a tremendous rebound since the darkest days at the onset of the pandemic. But now, inflation is sky-high, and it is the number one danger to the overall health and stability of a well-functioning economy. The war in Ukraine and the recent lockdowns in China, on top of the ongoing supply challenges and demand shifts, have led to inflation rates we have not seen in four decades. The priority for monetary policy is clear. The Federal Reserve is strongly committed to bringing inflation back down to our 2 percent longer-run goal. Price stability is absolutely essential for the economy to achieve its potential and sustain maximum employment over the medium term. I want to be clear: this is not an easy task. We must be resolute, and we cannot fall short.
This decision was a critical step in moving monetary policy expeditiously away from the very accommodative stance that we put in place early in the pandemic. The Committee is strongly committed to returning inflation to its 2 percent objective. In determining how quickly and how high to raise the rates in the future, we'll watch closely to see how the economy responds to tightening financial conditions and how inflation, inflation expectations, and the economic outlook evolve. As always, we will be data-dependent and nimble in our approach. With tighter monetary policy in place, supply and demand will be brought back into balance, and inflation will return to our 2 percent longer-run goal. This may take some time and may well be a bumpy road. Closing I'll close with this: Inflation is far too high, and price stability is absolutely essential for a strong economy. We have the tools to get the job done and are one hundred percent committed to achieving our goals. Thank you. 1 See Federal Reserve Bank of New York, “Regional Economy Profiles: Puerto Rico;" Federal Reserve Bank of New York, “Puerto Rico Economic Indicators." 2 Ruchi Avtar, Rajashri Chakrabarti, and Maxim Pinkovskiy, “Was the 2021-22 Rise in Inflation Equitable?," Federal Reserve Bank of New York Liberty Street Economics,  June 20, 2022. 3 Board of Governors of the Federal Reserve System, Federal Reserve Issues FOMC Statement, June 15, 2022.