Thread by @NickTimiraos

Powell is really underscoring the uncertainty associated with policymaking today. "We have to be humble about what we know about this economy." We thought the economy was heading to one destination until Delta came along.

Powell: We thought schools reopening and elapsing unemployment benefits would boost labor supply. That wasn't the case.

The learning for those of us who lived through the last cycle, over time, maximum employment can be somewhere different than anticipated.

Powell: It is very possible that the Fed has already met its inflation test for liftoff. The inflation language in the forward guidance might be a little stale.

Powell: We haven't evaluated whether we've met our inflation goal (even though he concedes that they probably have done so) because we *know* we haven't met our employment goal.

Powell: You want to position policy "to act in case it becomes necessary to do so, and we think we will be" in such a position.

"Judgmentally, it's appropriate for us to be patient."

Powell: If it looks like we need to raise interest rates, "we'll be patient, but we won't hesitate."

More on uncertainty:

The economy right now is "very, very difficult to forecast, and [it is] not easy to set policy. We have to set policy though. I don't think we're behind the curve."

"I think policy is well positioned to address the range of outcomes."

"Our policy will adapt and has already adapted."

Powell also concedes that part of the increase in inflation is "partly a demand story." (Supply chains aren't kinking up on their own. Something—demand—is doing it.)