Fed's Paulson keeps 'open mind' on rate policy outlook amid high inflation

“If policy is appropriately calibrated, I would expect to see growing signs that inflation is coming down,” Paulson said, adding, “if instead underlying inflation remains stubbornly elevated, the passage of time without progress would itself signal that more restrictive policy is needed.”

Paulson said the job market has stabilized and inflation is “too high.”

On the energy front, “oil prices have since jumped and remain volatile, but the brief period of Middle East stability demonstrated that supply shocks can be temporary, reinforcing the case for looking through such disruptions when setting monetary policy.”

The official said that underlying inflation is around 2.4% to 2.8%, noting this type of price pressure “has been elevated for a long time, and it is what I am most focused on as I evaluate our progress toward the 2 percent target.”