amico, kim, and wei ( 2014 ). similarly, a monthly survey conducted by the federal reserve bank of new york shows a noticeable decline over the past two years in household expectations for inflation three years ahead. however, these readings on shorter - term expectations may also be influenced by current gasoline prices. moreover, readings from this survey are only available since 2013, making it difficult to determine the significance of these results. bis central bankers ’ speeches the return to 2 percent inflation could take longer than expected and might require a more accommodative stance of monetary policy than would otherwise be appropriate. 8 despite the declines in some indicators of expected inflation, we also need to consider the opposite risk that we are underestimating the speed at which inflation will return to our 2 percent objective. economic growth here and abroad could turn out to be stronger than expected, and, as the past few weeks have demonstrated, oil prices can rise as well as fall. more generally, economists ’ understanding of inflation is far from perfect, and it would not be all that surprising if inflation was to rise more quickly than expected over the next several years. for these reasons, we must continue to monitor incoming wage and price data carefully. monetary policy implications let me now turn to the implications for monetary policy of this assessment of the baseline outlook and associated risks. the fomc left the target range for the federal funds rate unchanged in january and march, in large part reflecting the changes in baseline conditions that i noted earlier. in particular, developments abroad imply that meeting our objectives for employment and inflation will likely require a somewhat lower path for the federal funds rate than was anticipated in december. given the risks to the outlook, i consider it appropriate for the committee to proceed cautiously in adjusting policy. this caution is especially warranted because, with the federal funds rate so low, the fomc ’ s ability to use conventional monetary policy to respond to economic disturbances is asymmetric. if economic conditions were to strengthen considerably more than currently expected, the fomc could readily raise its target range for the federal funds rate to stabilize the economy. by contrast, if the expansion was to falter or if inflation was to remain stubbornly low, the fomc would be able to provide only a modest degree of additional stimulus by cutting the federal funds rate back to near zero. 9 one must be careful, however, not to overstate the asymmetries affecting monetary policy at the moment. even if the federal funds rate

. at present, long - term futures prices for natural gas are, on a btu - equivalent basis, notably less expensive than those for crude oil. clearly, limited substitution possibilities across fuels have resulted in persistent cost differentials, but those very differentials inspire the technologies that, over time, reduce such limitations. a clear example is gas - to - liquids ( gtl ) technology, which converts natural gas to high - quality naphtha and to diesel fuel. given the large - scale production facilities that are currently being contemplated ( and some that have already begun construction ), gtl is poised to become an increasingly important component of the world's energy supply. current projections of production however remain modest. gtl promises to add a good measure of flexibility in the way natural gas resources are utilized. in addition, given the concerns over the long - term adequacy of liquid production capacity from conventional oil reserves, gtl may provide an attractive, competitively priced, option for making use of stranded gas, which, for lack of access to transportation infrastructure, cannot be brought to market. * * * we are unable to judge with certainty how technological possibilities will play out in the future, but we can say with some assurance that developments in energy markets will remain central in determining the longer - run health of our nation's economy. the experience of the past fifty years - - and indeed much longer than that - - affirms that market forces play the key role in conserving scarce energy resources, directing those resources to their most highly valued uses. adequate productive capacity, of course, is driven also by nonmarket and policy considerations. to be sure, energy issues present policymakers and citizens with difficult decisions and tradeoffs to make outside the market process. but those concerns, one hopes, will be addressed in a manner that, to the greatest extent possible, does not distort or stifle the meaningful functioning of our markets. we must remember that the same price signals that are so critical for balancing energy supply and demand in the short run also signal profit opportunities for long - term supply expansion. moreover, they stimulate the research and development that will unlock new approaches to energy production and use that we can now only scarcely envision.