Inflation could then for some time remain quite stable in the face of an economy running hot. But if public confidence began to erode because of Fed inaction, a possible consequence could be the de-anchoring of inflation expectations, rather than a gradual and controlled move to an inflation rate sustainably around our 2 percent goal.
Of course, there are a variety of alternative explanations for the current surprising relationship between inflation and unemployment, and perhaps all of them are part of a full account.