2 These are lofty goals and, in my new position, I feel the weight of them. So when thinking about what type of variation in inflation is acceptable, it is natural for us to start by asking ourselves: what is in the public interest? Granted, this can be hard to define and opinions can differ.
But, when thinking about the issue, there are two factors that have particular prominence. These are employment and the stability of the financial system. When we find ourselves with inflation that is either lower, or higher, than normal, we want to feel confident that, over time, inflation will return to more normal levels.