• This is a hard judgment call.
• There is no expectation of needing to rise rates any further from here.
• The path forward is no longer obvious, and inflation reduction will take longer than expected.
• Even with a 25 BP move at the next meeting, it will still require patience from there; there are no expectations for dramatic sea changes in inflation.
• The underlying data on inflation is telling a very positive story.
• It’s a “pretty straightforward story” that inflation could return to 2% without rates rising further.
• Businesses are expecting wage growth to normalize; wages are considered a lagging indicator of price setting.
• There is a lot of evidence that services spending has peaked.