Suppose that the Phillips curve is given by =t=te+ 0.9*(5.1 - U_t) , where _t is the (actual) inflation in year t, te is the expected inflation in year t and U_t is the unemployment rate in year t, all measured in percentages. Note that this is a linear relationship between inflation and unemployment (straight line).

In period t=1, the unemployment rate is equal to the natural rate of unemployment, and the expected inflation is equal to 1.9%.

In period t=2, the authorities decide to bring the unemployment rate down to 4.2% and hold it there forever.

The expected inflation is always equal to the actual inflation in the previous year.

What will the inflation rate be in period t=3?