• Consumer demand remains healthy, though slowing
• Labor market reacceleration at this point seems unlikely
• There is more uncertainty around the path of inflation given that progress over last six months has been so reliant on goods
• Companies still trying to raise prices; need to see how consumers and competitors react
• First quarter will be important given that businesses tend to mark up at the start of the year
• US still at a point where inflation is above target and employment is near max
• Labor market is ’normalizing nicely‘
• No problem ‚toggling‘ rate to more normal levels as you build confidence inflation is falling

I think there is some real insight in these comments. The ‚toggling‘ idea is like the Fed taking out insurance and moving down to around 4.00% if inflation stays low. The comment about Q1 pricing is an important one too, given how strong prices rose in Jan/Feb of last year.

This article was written by Adam Button at www.forexlive.com.