Press conference exchange between STEVE LIESMAN and Fed Chair Jerome Powell:

user: I wonder if you could help me understand how the projections of the Committee line up with the goals of the Committee You’ve now altered the projections to—the statement to aim for inflation above 2 percent But when I look at the SEP I don’t see the Committee believing a single year in the next four years that you are ever above 2 percent In fact for each year you are below it until 2023 which is the first time that you actually hit 2 percent So do you think— you confident—is this just the Committee is not confident that not only can it not hit its 2 percent goal but that now it can’t hit its goal of being above 2 percent?

assistant: Not at all. And, you know, you don’t—you also don’t see people, by and large, lifting off or raising interest rates above zero. I guess there are 4 exceptions out of a Committee of 17 during that—during the forecast period. So we don’t reach 2 percent, but we get very close to it in the forecast. We reach 2 percent—I guess the median is 2 percent at the end of 2023. So, you know, what the guidance says. It says that we expect that the current setting of, of our rates will be—what we expect is that it will be appropriate until such time as we reach 2 percent inflation, that we feel that labor market conditions are consistent with our assessment of maximum employment, and that we’re on track to achieve inflation moderate—inflation moderately above. So that’s the test. So I don’t think there’s any conflict between those two because, you know, the, the way they’re set up, the projections don’t show the out years. You asked about confidence, and I would say that this, this very strong, very powerful guidance shows both our confidence and our determination. It shows our confidence that we can reach this goal and our determination to do so.

user: I’m sorry if I could just follow up without being simplistic about this But why wouldn’t—if the Committee was confident that it could reach its new goal of aiming for inflation above 2 percent why wouldn’t one of those years at least show inflation being above 2 percent on the median forecast?

assistant: Because it—we think, looking at everything we know about inflation dynamics in the United States and around the world over recent decades, we expect it will take some time. We expect that the economy will recover quickly now, but pace will slow as, as people go back to work. And we’ll still have an area of the economy—a big area of the economy—that struggles. There will be slack in the economy. The economy will be below maximum employment, below full demand. And that will tend to wear—to put downward pressure on inflation. So we think that once we get up closer to maximum employment, we think that inflation will come back, generally. And, I mean, that’s what happened during the last long expansion. It’s a slow process, but—but there is a process there. Inflation does move up over time. We do expect that will continue today, and we expect that our, our guidance is powerful and will help that outcome. We think that—that effectively saying that policy will remain highly accommodative until the economy is very far along in its recovery should provide strong support for the economy and get us there sooner rather than later.