Ok, what the report actually says is that (probably) Fed officials have resisted the IMF’s advice to allow inflation to overshoot 2% slightly in — what I would call — the late cycle. This would be required if the Fed were serious about hitting its inflation target of 2% on average looking forward.
Having the advanced training in economics, I know how an average works. You can’t always be at or below it. Sometimes you need to be above! I went to a very good school. Plus Larry Summers agrees, so I must be right.
But Fed officials are presumably claiming they have no such intention. I hope and think they are fibbing. The bond market appears to believe them.
One weakness with my own thesis is that I cannot rely on confirmation from Fed officials. My thesis is that they will do other than what they claim they will do. Specifically, they will “mistakenly” allow inflation to go above 2% in an apparent fit of forgetfulness, sort of like how the Brits acquired an empire when Britain still mattered. This makes my view non-falsifiable until it is too late. In other words, if I am wrong, there is no statement that will helpfully get me to bail. So I won’t claim this is a scientific proposition.