The rate of inflation for total personal consumption expenditures is expected to be 1¾-2%, at or a bit below the rate in 1999, which was elevated by rising energy prices. In preparing these forecasts, the Federal Open Market Committee members had to consider several of the crucial demand- and supply-side forces I referred to earlier.
[1] Maddaloni, A. and Peydró, J. L. (2011), “Bank risk-taking, securitization, supervision, and low interest rates: Evidence from the Euroarea and the US lending standards”, Review of Financial Studies, 24(6), pp. 2121-2165; Jiménez, G., Ongena, S., Peydró, J. L. and Saurina, J.