PELLEY: You disappointed a lot of people on Wednesday.
---
POWELL: We're very focused on our jobs, you know? We're focused on the real economy and doing the right thing for the economy and for the American people over the medium and long term. And I can't overstate how important it is to restore price stability, by which I mean inflation is low and predictable and people don't have to think about it in their daily lives. In their daily economic lives, inflation is just not something that you talk about. That's where we were for 20 years. We want to get back to that, and I think we are on a path to that. We just want to kind of make sure of it.
---
PELLEY: Why is your target rate 2%?
--
POWELL: So over, really over the course of the last few decades, central banks around the world have adopted – advanced economy central banks have adopted a 2% target. Why isn't it zero, I guess, is the question. And the reason is 2% is if interest rates always include an estimate of future inflation.
If that estimate is 2%, that means you'll have 2% more that you can cut in interest rates. The central bank will have more ammunition, more power to fight a downturn if rates are a little bit higher. In any case, that's become the global norm. And it's a pretty stable equilibrium and it seems to serve the public well.
----
PELLEY: Are you committed to getting all the way to 2.0 before you cut the rates?
-----
POWELL: No, no. That's not what we say at all, no. We're committed to returning inflation to 2% over time. I've said that we wouldn't wait to get to 2% to cut rates. In fact, you know, we're actively considering now going forward cutting rates, and on a 12-month basis inflation, you know, is not at 2%. It's between 2-3%. But it's moving down in a way that, that it gives us some comfort.