Various types of evidence bear on this question. For example, some recent research has considered expectations of inflation and other variables as measured by surveys. One clear finding is that, as inflation has come under control and has stabilized in the United States in recent years, long-term inflation expectations have stabilized as well, suggesting reduced uncertainty about the Fed's ultimate inflation objective.
For example, a cross-country study of inflation expectations by staff of the European Central Bank found that, since 1990, both the average level of expected inflation and the volatility of reported expectations of inflation in the United States have declined, the latter quite significantly (especially since 1999).7 However, as an aside, it is interesting that both surveys and the inflation compensation priced into the yields on indexed bonds suggest that today long-term inflation expectations in the United States remain in the vicinity of 2-1/2 to 3 percent, above the range of inflation that many observers believe to represent the FOMC's implicit target.