Is there some sort of mathematical reason behind this goal? Does 3% have some sort of long-term effects such that it becomes uncontrollable or something?
It seems like, inflation or not, places are just as busy (restaurants, Target/Wal-Mart, Costco, etc…).
In: Economics
1-3% Inflation is low enough to not upend people’s lives, while remaining high enough to prevent stagnation or deflation.
Currently We’re at 3% inflation, which it within the desired range. The reason the Fed is wating for 2% is that lowering interest rates will promote more spending. Spending raises inflation, so they want that 1% buffer to prevent it from getting out of hand when they lower interest rates.
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