4 ms·

Pedantic point, but US inflation has only climbed above 2% once in the past two years. If their target was 2 percent inflation, they should have been above it r

• endersshadow 13y ago
  Because the Fed is not bound to 2% by its mandate, like the ECB is, they're free to alter that number as they see fit. Typically, during recession, you'll target a bit lower of inflation so as to stay the purchasing power of the unemployed's savings. The last thing you want to do is to have inflation take off on somebody who's living off of savings. Even to get to 1.5, they needed to do some QE, so it's not all rainbows and sparkles. Inflation's a difficult beast to tame, but they at least have more influence over that than, say, GDP.
  • eru 13y ago
    They actually have quite a lot of influence on nominal GDP. (Real GDP is a different beast.)
• corin_ 13y ago
  To be even more pedantic, surely their targets would consider the mean not the median, so it wouldn't necessarily have to be over the target half the time for that target to still be the average.
• dllthomas 13y ago
  You're assuming they have sufficient control to hit within evenly-distributed noise of their target.