Fed’s Williams (voter) says the US economy is solid, while the underlying labour market is doing well

Middle East conflict is lifting inflation, though the surge in energy prices is likely short-lived. US is currently less sensitive to oil shocks than historically. Monetary policy needs to be data-dependent. Near-term inflation is around 4%, while core inflation is around 3%. Anchoring inflation expectations is critical. Sees elevated near term inflation expectations but long term is stable. Supply chain disruptions are a concern, which has occurred due to the Iran war. Fed must be clear that it is getting inflation to 2%. Path for monetary policy depends on data, outlook and risks. Monetary policy is well positioned, where the Fed wants it to be. Persistently high inflation would call for higher rates but that is not where we are today.  Better Fed communications improves policy effectiveness.