FOMC discusses inflation shocks, supply chain effects, and monetary policy tools.

These differ in their sources. Do they also differ in their effects on output and employment? Third, we took up the related question of price increases arising from shocks. The business CapEx boom, for example, is driving up prices of memory and logic chips and associated AI infrastructure. Do these changes indicate a broader inflationary dynamic, or do we just focus on them, because they are under the bright streetlight? Finally, we discussed monetary policy tools and strategies for achieving stable prices. If, as the Fed has long held, interest rate policy should be its primary monetary policy instrument.