I’ll begin with a brief review of how our inflation-targeting regime works, and then discuss the post-crisis inflation experience, the factors contributing to disinflation and the implications for monetary policy.
Medium-term inflation expectations have fallen over the past six months, but are currently near the 2 percent target midpoint (figure 4). External forecasters also expect inflation to return to target over the medium term. 4  BIS central bankers’ speeches  Crucially, the Bank is – and perceived to be – committed to its inflation target, which helps anchor inflation expectations.