Meaning: Bill Gross, a prominent businessman and investor, made this statement in reference to the efforts of Ben Bernanke, the former chairman of the Federal Reserve, and his colleagues to stimulate the economy through monetary policy. The quote reflects Gross's view that the central bank's primary goal is to increase inflation to a target of 2 percent or higher as a means of safeguarding against future economic downturns.

The mention of "reflating the economy" refers to the central bank's efforts to boost economic activity and increase the rate of inflation. During periods of economic weakness or recession, central banks often employ measures to stimulate economic growth, such as lowering interest rates, purchasing government securities, or implementing other monetary policies aimed at increasing the money supply and encouraging borrowing and spending.

Gross's assertion that the Federal Reserve has an "almost stated objective of inflation at 2 percent and higher" reflects the widely recognized target for inflation among central banks, including the Federal Reserve. A moderate level of inflation is generally considered conducive to economic growth, as it encourages spending and investment while preventing deflation, which can lead to decreased consumer spending and investment, potentially exacerbating economic downturns.

The reference to "some type of safety margin for a future recession" indicates Gross's belief that the central bank is deliberately seeking to maintain a higher level of inflation to provide a cushion against future economic contractions. In this view, a slightly higher rate of inflation could provide the central bank with more room to maneuver in response to future economic challenges, such as a recession. By aiming for a higher inflation target, the central bank may seek to ensure that it has sufficient policy space to lower real interest rates in the event of an economic downturn, thereby stimulating spending and investment.

It is important to note that Gross's perspective reflects one interpretation of the central bank's objectives and actions, and opinions on the appropriateness and effectiveness of monetary policy measures can vary widely among economists and market participants. Additionally, the role of inflation targeting and its implications for economic stability and growth are subjects of ongoing debate and research within the field of macroeconomics.

In summary, Bill Gross's quote highlights his belief that the Federal Reserve, under the leadership of Ben Bernanke and his colleagues, is actively pursuing a policy of increasing inflation to a target of 2 percent or higher as a means of providing a cushion against future economic downturns. This perspective underscores the importance of inflation targeting and the potential implications of monetary policy for economic stability and growth.