Below-target inflation increases the real value of debts owed by households and businesses and reduces the ability of central banks to respond to downturns.

The financial crisis and the Great Recession left firms with excess capacity, reducing incentives to invest. If businesses expect slower growth to continue, that will also hold down investment.

The only way to ensure that inflation expectations remain safely anchored near the FOMC's target is to keep inflation close to that target on a consistent basis.

Jerome Powell Quotes