Reported 28 days ago
The Federal Reserve's target of 2% inflation is designed to manage the economy effectively, promoting maximum employment and price stability. This target allows the Fed to have the flexibility to adjust interest rates as needed, providing a buffer for potential economic downturns. The concept of a 2% inflation target originated in New Zealand and was later adopted by central banks worldwide, including the Fed in 2012. Critics of this target argue it may be too low, potentially hindering economic growth and affecting labor market health, prompting the Fed to review its monetary policy strategies periodically.
Source: YAHOO