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Evans, Charles L. on 2018 April 20 at 09:40

Some cyclical upturn in inflation is actually welcome because it should help solidify expectations symmetrically around our 2 percent objective. This is necessary for achieving our inflation target on a sustainable basis.

Some cyclical upturn in inflation is actually welcome because it should help solidify expectations symmetrically around our 2 percent objective. This is necessary for achieving our inflation target on a sustainable basis. In this setting, the federal funds rate does not need to be increased as much above its neutral setting as in the past when trend inflation needed to be taken down several notches. Gradual policy increases in this context make sense—certainly as a way to limit the damage if policy ever actually becomes overly tight too soon. Evans, Charles L.

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