At the Peterson Institute, an official speaks about the current economic outlook and monetary policy, noting that while inflation is still high, progress is being made towards the 2 percent goal. Despite a temporary pause in progress earlier in the year, recent data on economic activity, the labor market, and inflation indicate renewed headway. With personal consumption expenditures inflation down to 2.7 percent from its peak of 7.1 percent in 2022, and core PCE inflation at 2.8 percent, down from 5.6 percent, there is cautious optimism about continued disinflation. Factors such as declining price adjustments, anchored inflation expectations, falling markups, and anecdotes from firms all point to improved price-setting behavior. Additionally, slower growth in labor costs and increased productivity from new business creation and AI technology support the view that inflation can be lowered without compromising economic growth. Finally, the current stance of monetary policy is seen as restrictive enough to cool the economy and encourage a gradual return to the 2 percent inflation goal.