Fed's Bullard: Inflation expectations may have drifted below the Fed's target

St. Louis Fed President James Bullard recently delivered his prepared remarks at the CFA Society of St. Louis, providing key quotes, via Reuters, found below.

Would take a decade of above-target 2.5 percent inflation to make up for recent five years of shortfalls.

U.S. economy around 4.6 percent below where it would be, in nominal terms, if Fed had met its inflation target in recent years.

In discussion of price level targeting approach, bullard says inflation expectations may have drifted below the Fed's target.

Shift from current inflation target to level-targeting approach would take "a lot" of planning, but could be considered a more optimal approach under some models.

Short of a formal shift in framework, policymakers could "lean" toward allowing inflation above target in order to make up for past shortfalls.