Press conference exchange between HOWARD SCHNEIDER and Fed Chair Jerome Powell:

user: Hi, Chair Powell. Thanks for doing this. And thanks, Michelle. Two, two quick questions. One, on the vaccine, do you have, or has the Fed modeled, a working estimate of when the U.S. might reach something approaching herd immunity? And, secondly, if you could, please connect with me the lack of movement on the decision to maintain the current pace and quantities of bond purchases with the fact that the SEPs are showing three years with inflation not reaching 2 percent. Some might argue that you need to do more to start fixing those expectations, and to let this drift and say “We’re going to miss our target for another three years” doesn’t show a very firm commitment to the new framework.

assistant: So, in terms of the vaccine, yes, you know, we do estimates of, of when the United States would reach herd immunity, and they’re, they’re going to be similar to what other people think. You know, it depends on your assumptions, such as how many people will actually take the vaccine and how fast will the rollout be. So it’s assumption based on assumption based on assumption. But, you know, sometime—it’s possible sometime in the middle or second half of next year. I’m not going to try to be precise, because it’s just another estimate. You know, our people are very good, but they’re looking at, at the same data as other people are. And so, you know, all the estimates are—it depends on what your assumptions are. But under a normal set of assumptions, it could happen as, as soon as the middle of next year. In terms of the, you know, inflation, a couple things—your second question. You know, we’re—I think you have to be honest with yourself about, about inflation these days. There are—there are significant disinflationary pressures around the world, and there have been for a while, and they persist today. It’s, is not going to be easy to have inflation move up. And it isn’t going to be just a question—it’s going to take some time. It took a long time to get inflation back to 2 percent in the last crisis. And, you know, we’re, we’re honest with ourselves and with you in the SEP that even with the very high level of accommodation that we’re providing both through low rates and very high levels of asset purchases, it will take some time, because that’s what we believe the underlying inflation dynamics are in our economy. And that’s why we’re—one reason why we’re concerned about inflation is that we see that. And, and that’s why we have adopted the flexible average inflation-targeting framework. That’s why we’re aiming for an overshoot. But we’re, we’re honest with ourselves and with the public that it will take some time to get there. In terms of, you know, would, would it really speed it up a lot to, to move asset purchases, you know, I don’t think that would really be—I think it’s going to take a long time however you do it. And, you know, we’ve been having very long expansions since—in, in the last several decades because inflation has not—really, the old model was, inflation would come along and the Fed would tighten, and we’d have a recession. Now inflation has been low, and we haven’t had that dynamic. And the result has been three of the four longest expansions in, in modern history, in recorded history. So, you know, we’re, we’re thinking that this could be another long expansion, and that we’ll keep our—what we’re saying is, we’re going to keep policy highly accommodative until the expansion is well down the tracks. And we’re not going to preemptively raise rates until we see inflation actually reaching 2 percent and being on track to exceed 2 percent. That’s a very strong commitment, and we think that’s the right place to be.