Nevertheless, core inflation has remained around 3 percent during the last few months and is expected to stay around this level during the rest of this year and next. Up to now, there is no evidence of secondary effects from recent changes in relative prices.
Interestingly, some of this work has been coauthored with a former colleague of mine at the Philadelphia Fed, Todd Vermilyea, who now works at the Board of Governors. Today, I plan to talk about the importance of taking a longer-term view in setting monetary policy.