Federal Reserve Chair Janet Yellen is giving a speech on inflation and monetary policy at UMass Amhearst.
Reviewing the history since the 1960s, Yellen highlighted two points: “that inflation is now much more stable than it used to be, and that it is currently running at a very low level.”
This is critical as one of the Fed’s mandates is price stability. Importantly, as the Fed begins to tighten monetary policy, it has to be mindful of price stability moving forward.
“I expect that inflation will return to 2% over the next few years as the temporary factors that are currently weighing on inflation wane, provided that economic growth continues to be strong enough to complete the return to maximum employment and long-run inflation expectations remain well anchored,” she said.
To get the jump on this, check out the charts below. We’ll update this post shortly with more colour.
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