The US economy is experiencing tight monetary policy, with financial conditions tightening and predicting below-trend growth.

The housing sector is showing signs of recovery, but further signs of above-trend growth could threaten inflation progress and require monetary policy tightening.

Labor market rebalancing has persisted for a year, with stronger participation among 25-54-year-olds and increased immigration enhancing labor supply.

However, labor market rebalancing is unfinished, and evidence of labor market tightness is no longer easing could prompt monetary policy.