In a prepared speech delivered on Wednesday, “the risk of inflation staying higher for longer must now be weighed against the risk that an overly restrictive stance of monetary policy will lead to a greater slowdown in activity than is needed to restore price stability,” said Federal Reserve Bank of Boston President Susan Collins.

She explained that this context calls for a "patient and careful, but deliberate, approach to policy," that would provide time for policymakers to assess the effects of actions taken to date.

Additional takeaways

"Too soon to say inflation is sustainably moving back to target."

"Fed can likely achieve goals without causing notable economic pain."

"Demand continues to outstrip supply, creating inflation pressure."

"There is still too much job market demand, rebalancing process is incomplete."

"Wage growth remains elevated compared to 2% inflation target."

"Core services inflation moderation has been modest."

Market reaction

The US Dollar Index showed no immediate reaction to these comments and was last seen losing 0.1% on the day at 104.70.