He is more cautious about inflation given lack of progress, with growing concern over the recent increase in inflation expectations.
Expectations surveys are imperfect, but the recent sharp rise means the Fed cannot let its guard down.
Uncertainty might also weigh on growth.
Focus should remain on inflation to protect the Fed's credibility.
Preference is to keep shrinking the balance sheet and the Fed's financial footprint as much as possible.
There may be a need to rethink the concept of core inflation given that once-volatile food prices now behave more like other goods.
Energy prices remain highly volatile.