Pimco: ‘Price Stability’ Is 2 Percent Inflation

McCULLEY: “Well, I think actually moving back up to 2% target [crosstalk].”
KERNEN: “That's just right? [crosstalk].”
McCULLEY: “Actually to say, we're going to move up from south of two for the last 5 years and stop magically at two, is not realistic. I mean, now look at price stability is in and around 2%, which means that cyclically, sometimes you'll be below. We’ve been below for five years. And actually, I’ll be a little bit provocative here. It's okay to be a little bit above 2% sometimes, as well. You're going to average 2%. You got to have data points on both sides of it. And I don't think that Janet will say that explicitly today. But, I don't think, she would vehemently disagree with that. There’s nothing like the world's going to end, if we have 2.1% versus 1.9%.”
QUICK: “Where do you get to a point? where you start to worry, if it starts to creep quickly higher? Or what would, kind of get the hackles on the back of your neck kind of going, wait a second, this is different?”
McCULLEY: “Actually, over the next 6, 12, 18 months, I can't see anything that would really get me upset. I just don't see the fundamentals of an incipient inflation problem.”