It follows that in implementing policy we would in principle be willing to accept the prospect of inflation outcomes close to the edges of the target, and conceivably even outside the target, in the next few quarters if we were reasonably confident that inflation would be back near the centre of the target within one to two years.
These have traditionally been most exposed to such oil price shocks and weather conditions. Nonenergy industrial goods not only show the lowest, but also the least volatile differentials. I have so far mentioned a number of reasons why divergences in price developments as such need not be particularly worrisome.