last year drops out of the calculation. the marked rise in food prices over the past 12 months has also pushed up the headline measures of price inflation. for many other categories of consumer goods, high order backlogs and tight supplies of key production inputs — like lumber and semiconductors — as well as logjams at the nation ’ s ports and a shortage of truck drivers are likely to push up prices over the next several months. but i expect that these pricing pressures will be temporary, easing over the course of this year as supply bottlenecks are gradually resolved. beyond this year, some observers have expressed concern that a rapid recovery in aggregate demand amid substantial fiscal support and accommodative monetary policy could lead to undesirably high inflation. while i expect that the stronger economy will push up inflation somewhat, let me explain why i do not expect pricing pressures to be excessive and why i believe the federal reserve is likely to continue supporting the economy for some time through accommodative monetary policy. here i will point to what has in the past seemed to be a relationship between inflation and unemployment, known as the phillips curve. over the past several decades, despite large swings in unemployment, inflation has been extremely stable. as an example, up to the beginning of the pandemic, when the economy was growing and unemployment was at a 50 year low of 3. 5 percent, inflation was still very low and stable. economists often attribute this so - called flat phillips curve to the fact that individuals ’ inflation expectations are well anchored and unlikely to respond to short - term pricing movements. survey data on long - run inflation expectations tend to back up this idea. they have been remarkably stable over the past decade, and, although they declined moderately during the middle of last year, most measures have edged up again in recent months and now stand roughly at the levels observed during the pre - pandemic period. with all of that said, given our lack of historical experience with both this level of substantial fiscal stimulus and highly accommodative monetary policy, my outlook for inflation is fairly uncertain. when making monetary policy decisions, we would be concerned about a significant increase in inflation above our 2 percent goal that was sustained for some time. but as my fed colleagues and i have said many times, monetary policy is not on a preset course. i will continue to monitor economic developments carefully, and, if my outlook for inflation were to change materially, my assessment of the appropriate

stance of monetary policy would change as well. i will wrap up by noting that the economy has made great progress since last spring, and i am optimistic that will continue in 2021, but we still have significant ground to make up and new strains of covid - 19 could slow progress in containing the pandemic. last year ’ s sharp contraction in economic activity was like nothing we had seen before, and we are still assessing its impact. one unresolved question, in my mind, is how resilient small businesses will prove to be after the extended period of reduced activity. what does all of this mean for the outlook for monetary policy? as we indicated in the policy statement released last week, my fomc colleagues and i expect to maintain an accommodative stance of monetary policy until employment and inflation achieve levels consistent with our maximum employment and inflation goals. at this point, the economy is still a long way from those goals. we are making progress, but i think it will take some time for us to get there. 1 the views expressed here are my own and are not necessarily those of my federal open market committee colleagues. i would also like to acknowledge the valuable contributions of federal reserve staff member wendy dunn. 2 the bls counts an establishment as “ closed ” if it reports no employment ( or does not report at all ) in the third month of the quarter after reporting positive employment in the third month of the previous quarter. the bls will eventually categorize closed businesses as “ deaths ” if they stay closed for four quarters. in recent years, the 4 / 5 bis central bankers'speeches annual establishment death rate has been around 8. 5 percent. 3 see leland crane, ryan decker, aaron flaaen, adrian hamins - puertolas, and christopher kurz ( 2020 ), " business exit during the covid - 19 pandemic : non - traditional measures in historical context, " finance and economics discussion series 2020 – 089 ( washington : board of governors, october ). 5 / 5 bis central bankers'speeches