This may be conducive to the credibility of the central bank: It contributes to limiting its accountability for moderate variations in inflation over the short term.Furthermore, a range is fully compatible with a gradual shift in the optimal inflation rate due to permanent shifts in productivity growth or other structural shocks.On the other hand, a range could be interpreted as a zone of indifference, with policy responding only when inflation approaches the edges.
Again, one suspects that the foreign operations of U.S. firms could be subject to a similar ratio requirement abroad as countries implement their Basel III commitments.