The case for raising the Fed’s inflation target to 3%

The Federal Reserve, the central banking system of the United States, currently maintains a keen focus on inflation, aiming to stabilize it to ensure the health and vitality of the U.S. economy. For several decades, their primary objective has been to keep inflation rates steady, with a target set at 2%.

This target is not arbitrary; it’s a carefully considered figure that aims to strike a balance between promoting maximum employment and ensuring stable prices for consumers.

Understanding inflation is paramount for understanding the economy, as it directly impacts the purchasing power of consumers and affects the rate of return on investments. Inflation also influences central bank decisions, including interest rate adjustments, which in turn can have broad implications for the economy at large, affecting everything from personal loans to mortgages.

In this report, CryptoSlate dives deep into the topic of inflation, its historical context, and current implications to present an argument for why the Federal Reserve should consider increasing its inflation target.