How 2% became the target for inflation

2024-12-24 10:02:04 source: category:Markets

If the Fed had a mantra to go along with its mandate, it might well be "two percent." That number, the Fed's longtime inflation target, has been adopted by many other central banks around the world. Jerome Powell said it 17 times in a press conference last week. It's become almost synonymous with smooth, healthy economic growth.

But how did two percent become the Fed's target? For an organization staffed with mathematicians and economists, the answer is surprisingly unsophisticated. Join us to hear about the history behind the number, and why some economists are calling for a change.

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