Economist, (2015), “Why the Fed targets 2% inflation”, The Economist explains, 13 September
ON SEPTEMBER 17th the Federal Reserve will conclude a two-day, rate-setting meeting at which it just might raise its benchmark interest rate for the first time in more than nine years. Arguing in favour of a hike is the low unemployment rate, which fell to 5.1% in August. Arguing against it is the rate of inflation which, having come in at 0.3% year-on-year in July, is well below the 2% target that is the lodestar of Fed policy. But why does the Fed want 2% inflation in the first place?
Relevant Posts
- Parramore, Lynn (2015) “Welcome to the Hunger Games, Brought to You by Mainstream Economics“, Institute for New Economic Thinking, 05 January