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Brainard, Lael on 2018 May 31

If we were to see a mild, temporary overshoot of the inflation target, this could well be consistent with the symmetry of the FOMC's target and may help nudge underlying inflation back to target.

[T]he persistence of subdued inflation, despite an unemployment rate that has moved below most estimates of its natural rate, suggests some risk that underlying inflation--the slow-moving trend that exerts a pull on wage and price setting--may have softened.5 For example, some survey measures of longer-run inflation expectations are currently lower than they were before the financial crisis, as are most estimates based on statistical filters. Inflation compensation has moved up recently but is still running somewhat below levels that prevailed before the crisis. Re-anchoring underlying inflation at the Federal Open Market Committee's (FOMC) 2 percent objective is an important goal... [I]f we were to see a mild, temporary overshoot of the inflation target, this could well be consistent with the symmetry of the FOMC's target and may help nudge underlying inflation back to target.7 Brainard, Lael

Forecasters Club of New York

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