This point was made explicit in our inflation-targeting framework the last time we renewed it in 2011. The timing for a return to target thus requires a judgment on the balance of risks. Even when inflation is at target, we can’t afford to be complacent. Sometimes there are forces pushing inflation higher or lower, and we need to use monetary policy to counteract them.
In such cases, the policy rate will need to deviate from its long-run level to provide the stimulus or restraint necessary to offset these forces. 3 There are also some situations in which we need to get ahead of shocks that we can see will have a significant effect on inflation in the future.