Powell set to deliver 'profoundly consequential' speech, changing how the Fed views inflation

[Tintrlvr]

While the Fed has been letting inflation undershoot their targets for a long time, I wonder whether low inflation was precisely because of Fed policy's focus on combating inflation. That is, inflation was low because the market expected the Fed to step in to slow down the economy if inflation got too high. That would imply that inflation will now increase (even without the economy surging, necessarily) because the markets will no longer expect anti-inflation interventions to be as harsh or as frequent.