If the post-2001 pattern persists in coming years, then 𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑡𝑡 would be expected to converge to zero within a few quarters and core PCE inflation to converge to 2 percent within two or three years, assuming that the unemployment rate remains near 4-1/2 percent (the median of the longer-run projections provided by FOMC participants) and there are no further shocks to the exchange rate and other factors.
By maintaining low and stable inflation, our monetary policy helps to keep the economy operating at full capacity and promotes greater stability in economic output. This is crucial in helping the economy to adjust to changing economic circumstances. Now, what does all of this have to do with the exchange rate?