Current policy rate is at the high end of neutral or mildly restrictive, borderline between restrictive and not restrictive.

A big part of expected disinflation is the runoff of tariff effects that raise prices on a one-time basis.

Goods inflation at 2% is not from restrictive policy but from one-time tariff runoff.

Important to keep policy mildly restrictive but not too restrictive due to downside risks in labor market.

Balancing two goals: labor market downside risks calling for lower rates vs. inflation upside risks calling for higher rates or no cuts.

Current borderline restrictive stance is the right place to be given the difficult balancing act.