This would correspond roughly to a 1½ percent inflation rate for the price index for personal consumption expenditures, based on recent differentials of this measure relative to the inflation rate for the CPI. The precise magnitude of the cushion should also be subject to adjustment over time to reflect ongoing research about its optimal size.
Time horizon There should be no fixed time horizon for returning inflation to its target when deviations occur. Such a horizon would be arbitrary, in some cases might not be credible, and potentially would constrain the ability of the FOMC to pursue the dual mandate.