If so, a lower level of unemployment might be needed to fully eliminate slack in the labor market, drive faster wage growth, and return inflation to our 2 percent objective.
9  Research suggests that, all else being equal, increased uncertainty and greater downside risk in the vicinity of the effective lower bound on nominal interest rates call for greater gradualism under optimal policy than would be the case if short-term nominal interest rates were appreciably above zero. This phenomenon is known as “policy attenuation” in the economic literature.