U.S. economic growth is expected to fall significantly below expectations of 2 percent this year, the Federal Reserve's Mousalem said. The baseline outlook does not point to a recession, but declining confidence, high prices, and loss of household wealth all point to slower growth. Financial conditions have tightened, but no market failure has been seen in the recent volatility. Markets are reacting to a reassessment of global economic growth. Tensions between the Fed's dual mandate objectives have increased as slowing growth and the risk of rising inflation has gradually become apparent. Inflation expectations remain stable and need to be ensured that they continue to do so. A balanced monetary policy will be pursued as long as inflation expectations remain stable.