This all goes back to Greenspan, he's responsible for breaking the fed.
well the fed was never a good idea. you cannot trust anyone to do the right thing with that much power.
This all goes back to Greenspan, he's responsible for breaking the fed.
2% is the target inflation. It allows some cost to just holding money, without too much cost. It allows some decrease to overly high salaries, without having to increase most salaries by too much. Most importantly, it is a nice safe distance from deflation, without being a lot of inflation. In the end, it is an arbitrary target, but does seem to work well.
We have been missing that target for over a decade. It would make sense that we were one percent below target for a decade, so we should be two percent above target for 5 years... I said makes sense, but not necessarily correct.
All in all, 4% would be fine with me. My guess is if you strip out supply chain issues, trump's oil shock, and Putin's invasion of Ukraine, you would be close to 4%. Can I prove that? No, but it would have to be a lower number, and 4% is a reasonable guess.
Greenspan lobbied for derivatives and bank deregulation while he was fed chair.well the fed was never a good idea. you cannot trust anyone to do the right thing with that much power.