Yet, I anticipate, as the FOMC indicated in its most recent statement, that inflation will move back toward our target over time. Indeed, we learned last week that the CPI moved up in April and is now running at 2 percent over the past year and at a 2.3 percent annual rate during the past three months.
I am encouraged that inflation expectations remain near their longer-term averages and consistent with our 2 percent target. Given the large amount of monetary accommodation that we have added and continue to add to the economy, I think there is some upside risk to inflation in the longer term. There are risks with respect to my growth forecast as well.