3 ms·
What is the target rate? Was under the impression that 2-3% is the target. Less than that is bad. More than that, also bad.
by cj 1y ago
What is the target rate?
Was under the impression that 2-3% is the target. Less than that is bad. More than that, also bad.
- andxor 1y agoThe target is 2 percent. Persistent 3 percent inflation is a whole different planet.
- cosmicgadget 1y agoFerenginar, after they abandoned the latinum standard.
- etrautmann 1y agoI am not an economist but would guess that three feels quite different from two.
- altcognito 1y ago2% was the target over the long haul (not 3%) -- BUT it is a dual mandate to keep unemployment to a minimum as well. This is considered on the high end of that part of the inflation mandate, and as another comment stated -- if it is persistent, it will be seen as a negative.
- cj 1y agoCompared to the past 12-24 months, 2.9% doesn't seem to be particularly worse than previous months. E.g. it was even higher at 3% at the beginning of the year and it has been at 2.7% for the past few months. Might not be at the 2% target, but at least looking at the graph, 2.9% isn't making me panic. Maybe the panic is warranted, I don't know. https://www.cnbc.com/2025/09/11/consumer-prices-rose-at-annual-rate-of-2point9percent-in-august-as-weekly-jobless-claims-jump.html#:~:text=target%20is%202%25.-,On%20employment,-%2C%20the%20Labor%20Department https://www.cnbc.com/2025/09/11/consumer-prices-rose-at-annu... Edit: Although maybe it does get more worrying if the hypothesis is that reducing rates will result in upward pressure on inflation. That could be worrisome.
- altcognito 1y agoOh, it's definitely not, and panic is definitely not called for. I think that's why they feel they have the leeway to lower interest rates to combat weaker job numbers. I think the concern is that we'll paint ourselves into a corner and end up with interest rates persistently at double (or worse) the target.