Higher energy prices will quickly impact consumer spending and business investment due to uncertainty about future macro environment.

If energy price resolution occurs within 1-2 months, Fed views it as a blip; if longer, will see economic reaction.

Higher energy prices are inflationary, feeding into higher prices generally, while fiscal stimulus also pushes inflation upward short-term.

Expects neither rate hikes nor rate cuts due to conflicting effects: economic slowdown from energy prices vs. inflationary pressure.