Miran on what it would take to raise interest rates

• The Fed would raise interest rates if oil shocks lead to inflation expectations bleeding beyond the first year or cause a wage-price spiral (second-round effects).
• First-round effects of supply shocks are not traditionally something the central bank responds to.
• Current monetary and fiscal policy settings are significantly less accommodative than in 2021-2022, which should limit the broader economic impact of higher oil prices.

Federal Reserve Governor Stephen Miran outlines the conditions for raising interest rates, emphasizing that the Fed would respond to 'second-round effects' of inflation, such as inflation expectations becoming entrenched or a wage-price spiral. He contrasts the current policy environment with the highly accommodative stance of 2021-2022, suggesting less immediate concern about supply shocks reverberating through the economy.