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00:00They said in terms of the Fed's new framework this morning that you can't be timid in terms of trying to get inflation above 2 percent. What is having inflation above 2 percent for some time . Mean to you. How much higher than 2 percent for how long . What is not being timid to me . Well I think we've got to overshoot 2 percent for sure. I think if we don't get inflation to 2 percent this cycle if something happens and inflation doesn't get to 2 percent I mean our credibility really rests on achieving our dual mandate objectives and 2 percent is an important part of it especially when we've been under running it for so long. So I think we have to cross over beyond 2 percent with some momentum so that we get up above. I would be quite pleased if we could get inflation core inflation up to two and a half percent for a time because then that would indicate that we are really balanced in our perspectives. We're able to provide as much accommodation as the economy needs and it's completely consistent with our objective of achieving 2 percent on average because we've experienced inflation down at 1 percent for periods of time one and a quarter percent for periods of time. Two and a half is not even a large number. Well sure we have some kind of Evans rule where you target a specific level of inflation . I think our current state mind gets us very far along the path of very effective forward guidance. We've indicated that we're going to we certainly expect to keep the funds rate at zero to a quarter percent at least until inflation gets to 2 percent. And it's on track confidently on track to to overshoot 2 percent once we get there. We still can increase rates and be accommodated. The first few policy moves are still very accommodative monetary policy especially if the labor market is as strong as I would expect when we finally start raising interest rates. And so I think we've got the elements of you know our pass threshold for guidance. I just don't think that as long as we continue to speak strongly about we're going to meet our objectives we're going to overshoot inflation there's not going to be any concerns that we're going to pre-empt that . I think we'll be fine .

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Fed’s Evans Would Be ‘Quite Pleased’ With 2.5% Core Inflation

Chicago Fed President Charles Evans says the central bank has “to overshoot inflation for sure” in the aftermath of the Covid-19 pandemic. He speaks with Bloomberg’s Michael McKee on "Bloomberg Markets: European Close." (Source: Bloomberg)

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