As for Plosser, it's warning the Federal Reserve against straying from what he sees as the central bank's main mission: fighting inflation. To him, keeping prices stable makes it possible for the Fed to fulfill its other mandates: promoting maximum employment and moderate interest rates.
Reality:
Market expectations for US inflation have dropped to their lowest level in a year and are now below the Federal Reserve’s unofficial target, as investors respond to the central bank’s latest attempt to stimulate the economy.
The expected rate of inflation over the next 30 years, as measured by the difference between Treasury Inflation Protected Securities, Tips, and cash government bonds, dropped as low as 1.85 per cent in recent days from 2.73 per cent since last month. The rate was just under 2 per cent on Tuesday.