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Retaining a modestly restrictive policy stance is considered appropriate for the time being.
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Supports a “patient approach” on changing the Fed’s policy rate.
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Policy rate is not far from neutral, but inflation remains too high.
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Tariffs’ limited effect on inflation is a reason to keep policy on hold, not to cut rates.
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Tariffs’ likely muted effect on inflation is a sign that policy is appropriately calibrated.
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No possibility of knowing the full effect of tariffs on prices over the next few months.
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Will adjust views if there are signs of significant weakening in demand growth.
Summary (hawkish tilt):
The stance is firmly on holding rates steady, with inflation still viewed as too high and tariffs’ muted inflation impact reinforcing the case against cuts. The policy rate is seen near neutral, but the preference is for a patient, modestly restrictive approach until clearer signs of demand weakness emerge
