Fed tools work on demand, not supply. For supply shocks like energy, the classic tendency is to 'look through' them because they tend to be temporary and monetary policy works with long lags.

By the time tightening takes effect, the oil price shock is probably gone, and you'd be weighing on the economy inappropriately.

Critical to monitor inflation expectations carefully because a series of supply shocks can lead the public to expect higher inflation over time.

In the current context, must be mindful that inflation has been coming down close to 2% post-pandemic but hasn't stabilized there, and inflation expectations appear well-anchored beyond short term.

The Fed isn't facing a decision yet because economic effects are unknown, but will consider this broader context when making decisions.