Fed's Powell Says Long-Term Inflation Expectations Well-Anchored

Group 1 - The Federal Reserve's response to rising oil prices involves navigating trade-offs between demand and supply shocks [1][2] - Monetary policy primarily influences demand, with higher rates moderating demand and lower rates stimulating it [2][4] - Supply shocks, such as energy price shocks, typically do not have significant short-term effects on supply, complicating the Fed's response [2][4] Group 2 - Historical energy shocks have been transient, and the effects of monetary policy adjustments often lag, potentially leading to inappropriate economic impacts [3][4] - Continuous monitoring of inflation expectations is crucial, as repeated supply shocks can lead to a general expectation of higher inflation over time [5][6] - The current inflation context shows a trend towards 2% post-pandemic, but the Fed has not consistently maintained this target [6][7]