Yellen: Inflation to Rise to 2% Over Next 2-3 Years

The transcript discusses the current state of inflation, noting that personal consumption expenditures have been about 1% over the past year, which is below the 2% target. Core inflation, excluding energy and food, is around 1.5%. The committee expects inflation to rise to 2% as temporary factors fade and the labor market strengthens. The stability of long-term inflation expectations is crucial, though financial market measures have declined. The committee will continue to monitor inflation indicators to guide future policy decisions.

What is the current rate of personal consumption expenditures over the past 12 months?

• 1.5%

• 2%

• 1%

• 3%

What factors are contributing to the shortfall in reaching the 2% inflation objective?

• Increased energy prices

• Higher import prices

• Earlier declines in energy prices

• Rising food prices

Over what time frame does the committee expect inflation to rise to 2%?

• 1-2 years

• 2-3 years

• 3-4 years

• 4-5 years

What is the committee's view on the stability of long-term inflation expectations?

• They are declining rapidly

• They are reasonably well anchored but not guaranteed

• They are guaranteed to remain stable

• They are unstable and unpredictable

What has been observed in financial market measures of inflation compensation?

• They have remained stable

• They have increased

• They have declined

• They have fluctuated wildly