If expectations move significantly above our 2 percent goal, it would make it more difficult to change people’s perceptions about the duration of high inflation and potentially more difficult to get inflation under control.
As we see surveys like the Michigan survey report higher longer-term inflation expectations, we need to pay close attention and continue to use our tools to address inflation before these indicators rise further or expectations of higher inflation become entrenched. As I mentioned earlier, one force driving inflation is the extremely tight labor market.