But  BIS central bankers’ speeches  1  since the start of the recession almost seven years ago, the PCE inflation rate has averaged 1.5 percent. Over the past year, it has averaged 1.6 percent. And I expect it to remain below 2 percent until 2018.
The persistently below-target inflation rate is a signal that the U.S. economy is not taking advantage of all of its available resources. If demand were sufficiently high to generate 2 percent, then demand would be sufficiently high to allow the economy to make use of the underutilized resources. And the most important of those resources is the American people.