Why Is the Fed So Obsessed With 2 Percent Inflation?

The Covid-induced inflation crisis is pretty much over. The consumer price index peaked at 9.1 percent in June 2022 on an annualized basis (that is, compared to June 2021), then fell 12 consecutive months. It ticked up slightly in July 2023 to 3.2 percent, the Bureau of Labor Statistics reported Thursday, but “core” inflation (that is, the inflation rate minus volatile food and energy prices) actually dropped slightly, to 4.7 percent. The nonannualized numbers, The Wall Street Journal pointed ou

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