recent years, would adopting a model with multiple price components improve our understanding of and ability to forecast overall inflation? relatedly, should we look to inflation models with nonlinear or threshold effects, which could capture, among other things, supply constraints? the pandemic has had a much more prolonged effect on labor supply than many expected, and rapid nominal wage growth has accompanied the recent rise in inflation in ways that traditional measures of labor market tightness — such as the unemployment rate gap — might not be capturing. many analysts have used data on job vacancies to go beyond a simple unemployment rate gap indicator, and i see merit in such approaches. we should ask how we can better understand the relations among realizations of inflation, inflation expectations, and the rate of inflation to which the economy would gravitate after the effects of temporary shocks have ebbed. finally, we should consider if there are ways to better anticipate structural breaks in the inflation process. for example, inflation could become a nonstationary time - series process if inflation expectations were to become de - anchored. the responses to these questions lie in further research — research that will be made richer, more useful, and, hopefully, easier if we expand our data sources to include more real - time and other novel indicators. when the economy is disrupted by a once - ina - century event, there is no such thing as too much data and too much analysis. - 8thank you.

inflation expectations — near - and long - term, as well as survey - and market - based — that cover many different participants in the economy. since the onset of the pandemic, medians of many surveys of longer - run measures suggest that inflation expectations are still within their pre - pandemic ranges, despite having come up a little. this is consistent with overall pce price increases declining to a 2 percent pace. market - based measures of inflation compensation beyond - 6the near term, such as those derived from treasury inflation - protected securities, or tips, tell a similar story. i have also looked beyond the headlines of the survey data to assess how inflation expectations are moving and responding to the current high - inflation environment. for example, in the michigan surveys of consumers, we can compare households ’ perceptions of past inflation to their expectations of future inflation at the 1 - year and 5to - 10 - year horizons ( figure 8 ). the comparisons show that while households have raised their inflation expectations over the past few years, especially for the short - term measure, the increases were far less than one - for - one with how much they perceived inflation had already risen. i will monitor these comparisons to ensure that inflation expectations remain well anchored. any de - anchoring of expectations would be a major concern, as it could cause the high inflation that we have been experiencing to prove more persistent. looking ahead, the outlook for inflation will depend, in part, on how the factors restraining supply responses and boosting cost pressures in each of these three main pce price categories play out. i think it is quite possible that the organization of production and supply chains will look different in the coming years from the way they did before the pandemic, as firms evaluate some newly exposed tradeoffs between keeping costs low and supplies available. we should keep a close eye on the incoming indicators of production disruptions and bottlenecks. we should also advance our understanding of how an environment of more frequent disruptions to the production and distribution systems will affect potential output, feed into inflation, and become an important element in forecasting inflation, assessing risks, and adjusting monetary policy. - 7we must also continue to advance our understanding of inflation and its underlying structural causal relationships as well as our ability to forecast risks. progress in these areas would help us better assess developments in real time. some questions deserve further attention and study. as sectoral supply – demand imbalances have played a key role in understanding inflation in