Inflation is seldom caused by lump-sum transfers but is often caused by higher government spending programs.

The FOMC’s “mandate-consistent inflation rate” is generally judged to be “about 2 percent or a bit below.”

Policymakers should not think of price stability and economic stability as competing objectives but as complements - the best way to achieve the latter is to be firmly committed to achieving the former.

Must the FOMC increase its target before inflation, or will inflation increase and cause the FOMC to increase its target?

Large-scale asset purchases may have limited power to raise TIPS-implied inflation expectations—something that might appeal to policymakers fighting deflation.

The effect of QE2 on interest rates could be small and limited to an announcement effect.

The sale of typical securities would force the Fed to contract its lending programs, whereas the sale of Fed bills would not.

In order to maintain its credibility, however, the FOMC will have to take actions consistent with achieving its stated inflation objective.

Oil price shocks appear to have only transitory effects on headline inflation and virtually no impact on measures of underlying trend inflation.

Despite U.S. fiscal problems, the Fed appears to still retain excellent inflation credibility with financial markets… Although confidence in the Fed might explain the quiescence of inflation expectations, the structure of U.S. government debt may be more important… [I]nflating away the U.S....