Philip N Jefferson: Recent inflation and the dual mandate

Remarks by Mr Philip N Jefferson, Member of the Board of Governors of the Federal Reserve System, at the Ec10, Principles of Economics, Lecture, Faculty of Arts and Sciences, Harvard University, Cambridge, Massachusetts, 27 February 2023.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Accompanying charts of the speech 

Thank you, Jason, for inviting me to join your economics class and for your kind introduction. It is a pleasure to be here. I miss teaching economics classes.

Before I continue, I would like to note, as I always do, that the views I will express today are my own and are not necessarily those of my colleagues at the Board of Governors of the Federal Reserve System or the Federal Open Market Committee (the FOMC).

What I like about economics is that it deals with real-world issues, and many times we experience firsthand a topic discussed in textbooks. Take the recent inflation, for example. This may be your first experience with high inflation. I am sure you noticed prices going up at restaurants, supermarkets, and the gas pump without having to read about it in the newspaper. I, for one, can confirm that the inflationary pressure in the rental housing market in the Washington, D.C., area is real. While we have all experienced prices going up, it's challenging to measure inflation itself and its consequences.

Today, I want to do the following: discuss with you different ways to measure inflation, characterize our recent inflation, and contextualize the battle against inflation in terms of the Fed's dual-mandate goals of price stability and maximum employment. Then, I will offer some concluding remarks.