With these conditions met, we can achieve better automatic stabilisation of future economic shocks, as the participants in the economy will understand how monetary policy will act going forward and be able to adjust their expectations accordingly. If the private sector instead perceives the scope for monetary policy as being limited or the policy as being hard to grasp, credibility for the inflation target may be jeopardised, particularly in a situation in which these limits are perceived as longterm. Proposals for tools that could be used to provide better possibilities for counteracting a recession include: • • • • • • •  Raised inflation target Make up strategies for better automatic stabilisation of the economy after shocks Quantitative easing used systematically in the implementation of monetary policy Forward guidance Coordination with fiscal policy under special circumstances Fiscal policy stimulation measures funded with central bank money, socalled helicopter money Acceptance of low inflation  We shall now examine the arguments behind these proposals. Raised inflation target Firstly, it must be said that the proponents of this idea do not usually mean raising the inflation target in the current situation. Rather, if the inflation target is to be raised, this should be from a normal level, when inflation has been close to the target for some time and monetary policy has become somewhat normalised.
But the data and conditions have not progressed enough for the FOMC to shift its monetary policy stance of strong support for the economic recovery. Specifically, the FOMC decided last week to maintain the target range for the federal funds rate at zero to ¼ percent and made no changes to its program of asset purchases. In thinking about adjusting its stance in the future, the FOMC has defined conditions and measures that will inform its decision-making. In terms of the federal funds rate, the FOMC said it expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the FOMC’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. The FOMC also said it will maintain its current asset purchase pace until substantial further progress has been made toward its employment and inflation goals.5  Conclusion I hope you remember the “things we said today,” but if not, here’s my final message. The sun is shining, both literally and figuratively. Progress on vaccinations and the economy is very welcome news, and I look forward to a full and complete recovery, accompanied by inflation that averages 2 percent over time. Thank you, and I look forward to your questions.