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

Weak lending may still be the culprit behind low inflation, but monetary aggregates may no longer closely track credit conditions.

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.

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

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

If oil prices continue to rise and the RMB continues to appreciate, the U.S. inflation rate may increase at a faster pace in the near future. And this would have an unwelcome impact on consumers’ wallets.

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

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