. thus, there are compelling reasons to expect the well - entrenched inflation dynamics that prevailed for a quarter - century to reassert themselves next year as imbalances associated with reopening are resolved, work and consumption patterns settle into a post - pandemic “ new normal, ” and some of the current tailwinds shift to headwinds. 14 i will be carefully monitoring measures of longer - term inflation expectations to ensure they are well anchored at 2 percent. to date, various measures suggest inflation expectations remain well anchored and broadly consistent with our new framework. the index of common inflation expectations moved back to 2 percent in the first quarter, returning to its level in 2018, which is lower than its level prior to 2014. 15 in addition, the term structure of market - based measures of inflation compensation is consistent with market participants expecting a limited period of inflation above 2 percent. a straight read of the difference between the forward nominal treasury curve and the forward treasury inflation - protected securities curve implies inflation compensation is expected details on the cfo survey, which is a partnership of duke university, the federal reserve bank of richmond, and the federal reserve bank of atlanta, can be found on the richmond fed ’ s website at https : / / www. richmondfed. org / research / national _ economy / cfo _ survey. statistical models estimate that underlying core pce inflation ranges from 0. 1 to 0. 4 percentage point below the 2 percent longer - run target. see the point estimates for 2019 : q2 in table 1 in jeremy b. rudd ( 2020 ), “ underlying inflation : its measurement and significance, ” feds notes ( washington : board of governors of the federal reserve system, september 18 ), https : / / www. federalreserve. gov / econres / notes / feds - notes / underlying - inflation - its - measurement - andsignificance - 20200918. htm. see hie joo ahn and chad fulton ( 2020 ), “ index of common inflation expectations, ” feds notes ( washington : board of governors of the federal reserve system, september 2 ), https : / / doi. org / 10. 17016 / 2380 - 7172. 2551. - 9to be higher for the next two years and to decline subsequently and remain stable 5 and 10 years into the future. i will remain attentive to the risk that what seem like transitory inflationary pressures

could prove persistent as i closely monitor the incoming data. should this risk manifest, we have the tools and the experience to gently guide inflation back to our target. no one should doubt our commitment to do so. but recent experience suggests we should not lightly dismiss the risk on the other side. achieving our inflation goal requires firmly anchoring inflation expectations at 2 percent. following the reopening, there will need to be strong underlying momentum to reach the outcomes in our forward guidance. remaining patient through the transitory surge associated with reopening will help ensure that the underlying economic momentum that will be needed to reach our goals as some current tailwinds shift to headwinds is not curtailed by a premature tightening of financial conditions. the outlook is bright, but risks remain, and we are far from our goals. the latest employment report reminds us that realized outcomes can diverge from forward projections and underscores the value of patience. as the economy reopens fully and the recovery gathers momentum, it will be important to remain patiently focused on achieving the maximum - employment and inflation outcomes in our guidance.