In part, this expectation reflects the significant improvement in labor market conditions over the past few years. As shown in figure 2, the unemployment rate (the blue line) now stands at 4.4 percent, somewhat below the median of FOMC participants’ estimates of its longer-run sustainable level (the black line). As the green stars indicate, labor market conditions are expected to strengthen a bit further.
The inflation outlook also reflects the Committee’s judgment that inflation expectations will remain reasonably well anchored at a level consistent with PCE price inflation of 2 percent in the long run, and that the restraint imposed in recent years by a variety of  1  The Statement on Longer-Run Goals and Monetary Policy Strategy is available on the Board’s website at www.federalreserve.gov/monetarypolicy/files/FOMC_LongerRunGoals.pdf.