A higher target gives the Fed more room to cut rates before hitting zero in the next downturn, which was a real constraint during the 2010s.
Naima
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A higher target gives the Fed more room to cut rates before hitting zero in the next downturn, which was a real constraint during the 2010s.
The 2% target is a hard-won anchor for expectations built over decades — moving it now would signal the Fed folds under pressure whenever inflation runs hot.