Press conference exchange between DAVID GURA and Fed Chair Jerome Powell:

user: Thank you, Mr. Chairman. I was going to ask if you’ve started drafting your Jackson Hole speech, but I’m going to go in a—in a different direction here. Steve Liesman asked you about semantics. I’m going to take a cue from him and ask you about the term “transitory,” because I think of you as somebody who’s so lucidly explained policies and programs in recent months and made a real concerted effort to explain them to, to the American public as a whole. I wonder about this term and what you would say to people who don’t know it definitionally, don’t know what it means, and see prices going up and wonder how long they’re going to have to wait. So just some broader definition from you—I’d like to hear just about what it means or how you understand it. And, and quickly as well, you’ve talked about vaccines a bit. And your colleague in Minneapolis has placed a mandate on vaccinating employees coming back to that Federal Reserve Bank. And I wonder if that’s something that you would like to see or expect to see Systemwide going forward.

assistant: The concept of “transitory” is really this: It is that the increases will happen. We’re not saying they will reverse. That’s not what “transitory” means. It means that the increases in prices will happen, so there will be inflation but that the process of inflation will stop so that—so that there won’t be further—when, when we think of inflation, we really think of inflation going up year upon year upon year upon year. That’s inflation. When you have inflation for 12 months or whatever it might be—I’m just taking an example; I’m not making an estimate—then, then you have a price increase, but you don’t have an inflation process. And so part of that just is that, if it doesn’t affect longer-term inflation expectations, then it’s very likely not to infect—to affect the process of inflation going forward. So what, what by “transitory” is just something that doesn’t leave a permanent mark on the inflation process. Again, we don’t mean—I don’t mean that, that, that, that, you know, producers are going to take those price increases back. That’s, that’s not the idea. It’s just that they won’t go on indefinitely. So to the extent people are, are, are implementing price increases because raw materials are going up or labor costs or something’s going up, you know, the question, really, for inflation really is, does that mean they’re going to go up the next year by the same amount? So you’re going to be in a process where inflation, the inflation process, gets going. And, and that happens because people’s expectations about future inflation move up. And we don’t think that’s happening. There’s no evidence that it’s happening. All the evidence is that it’s not happening. But, nonetheless, we have to watch this very carefully because this is—you know, we have two mandates: maximum employment and price stability. Price stability, for us, means inflation averaging 2 percent over time. And so we’ve got to be very careful about that. But, but I, I, I think it’s a good point that it’s, it’s a term—what it really means is temporary. But then you’ve got to understand that it doesn’t mean that the—that the increases will be taken back. Some of them will be, but, but that’s not really what it means. In terms of—so we’re, we’re working virtually here, and we’ll be coming back down the road in a couple of months, starting to bring people back here at the Board of Governors in Washington. And, you know, we’re going to follow public health guidance and things like that. We really haven’t made the fundamental decisions about exactly what that will look like. And it’ll depend on, to some extent, on what—on what, you know, CDC guidance looks like when we actually do bring people back in.