In hindsight, Rosengren said, the Fed’s 2 percent target has acted more like a ceiling than a symmetric target. Still, below-target inflation factors into current policy: “One reason for the policy committee’s decision to be patient in determining future rate adjustments, despite tight labor markets, is waiting to see more convincing evidence that inflation will achieve and sustain the 2 percent inflation target.” Rosengren said the below-target inflation and low interest rate environment would give monetary policy-makers little space to maneuver in a hypothetical next recession. In each of the last three downturns, ... (full story)