Thank you for that.
One of the problems with success is that you forget why you put in place the framework to begin with.
As I said in my remarks, we've had 15 years of low, stable, and predictable inflation. We owe it to my predecessors and the excellent and dedicated staff at the bank for achieving that success, but we have had 15 years, and people do forget about the costs of inflation. The cost of inflation, I want to emphasize, is what we risk putting in peril if we take our eye off the ball, and I want to assure you I will not take my eye off the ball.
Inflation erodes the value of money. I will put an aphorism in, a Yogi Berra: a nickel ain't worth a dime any more. That is the reality. We see the debate about what to do with a penny; ultimately, that's the consequence of years of inflation compounded.
Second, inflation creates uncertainty. It creates uncertainty and has a marked impact on investment and consumption, but investment ultimately, and output and jobs.
Third--and I mentioned this in my remarks, but it really does bear repeating--inflation affects the most vulnerable. It's the poorest people in society who are least well positioned to hedge against inflation and least well positioned to use sophisticated financial products or contracts to protect themselves.
The fifth and most important point when we think about inflation--I shouldn't say the most important point, but the fifth point--and one that really does bear emphasizing, is that inflationary booms always end badly, and you often get a boom when you start to have a run-up on inflation. They always end badly, and Herculean effort is required to put us back onto the path we were already on.
Right now we have low, stable, predictable inflation. We have expectations well anchored. It's incredibly valuable. To those who think about changing the target or adding additional targets when we only have one instrument, I would point out the risks they run in terms of impacting all these costs.