Indeed, this pattern of mid-cycle declines in unemployment coincident with noninflationary increases in real wages has been evident in the U.S. data since the 1990s. 11 With regard to inflation expectations, there is broad agreement among academics and policymakers that achieving price stability on a sustainable basis requires that inflation expectations be well anchored at the rate of inflation consistent with the pricestability goal.
This is especially true in the world that prevails today, with flat Phillips curves in which the primary determinant of actual inflation is expected inflation.