Federal Reserve Bank of San Francisco

Oil markets have experienced considerable volatility. In the latest SF FedViews, Vice President Adam Shapiro writes that the ultimate economic impact from higher prices will depend critically on how long market disruptions persist. sffed.us/4vAAF2K

Contacts reported a weaker economic outlook and heightened uncertainty stemming from the impact of the ongoing conflict in the Middle East on energy markets and global supply chains.

Retail sales grew slightly on net, while demand for consumer and business services was stable overall.

The latest Twelfth District Beige Book reports that economic activity was somewhat subdued but largely stable during the mid-February through March reporting period. sffed.us/beigebook

Contacts reported a weaker economic outlook and heightened uncertainty stemming from the impact of the ongoing conflict in the Middle East on energy markets and global supply chains.

Retail sales grew slightly on net, while demand for consumer and business services was stable overall.

The San Francisco Fed’s Center for Monetary Research just released a new tool that lets users calibrate the hypothetical monetary policy rate path based on their own views of the economy and interpretation of the dual mandate. frbsf.org/research-and-i…

Following his presentation, Professor Jones will answer live and pre-submitted questions with our host moderator, Huiyu Li, co-head of EERN and research advisor at the @sffed.

Professor Jones will discuss how AI accelerates the “ideas production function” and how advances in machine intelligence can transform the productivity gain per unit of R&D investment. Register for the event: sffed.us/EERN415

On April 15, we’ll welcome Benjamin F. Jones, professor of entrepreneurship at Kellogg School of Management at @NorthwesternU, where he will share a framework for analyzing the impact of AI on R&D.

Prices for some goods and services are not directly observed and must be indirectly derived for measuring inflation. A new Economic Letter examines this nonmarket-based inflation and its implications for monetary policy. sffed.us/4vfLs1Z

"Simply stated, slower labor force growth translates into lower benchmark job gains."--@MaryDalyEcon sffed.us/4c0IaXB

What does a slow growth labor market mean for monetary policy? For one, it means "traditional 'rules of thumb' for labor market health are changing," writes President Mary C. Daly in a new blog post.

What impact do Fed communications have on inflation expectations? Research using a new San Francisco Fed database shows how Federal Open Market Committee statements and post-meeting press conferences alter market-based inflation expectations. sffed.us/41HBpVP

New research drawing on data from multiple advanced economies shows that after tariffs, inflation initially falls due to a decline in demand. But it gradually reverses course, driven first by goods and later by services categories. sffed.us/3PwkPWt

So, for now, recognizing the uncertainty, examining potential scenarios, and staying focused on restoring price stability and supporting full employment no matter how the economy evolves is optimal communication and appropriate policy.

But offering too much forward guidance in an uncertain world risks conveying a false sense of certainty, reducing rather than improving transparency, and making it harder for the public to clearly predict how the FOMC will react.

With all of this uncertainty, what’s the outlook for monetary policy? There is no single most-likely path. With policy in a good place, we need to remain flexible, able to respond to rapidly evolving risks. Now, this may seem vague, even dissatisfying.