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Early proposals of monetary systems targeting the price level or the inflation rate, rather than the exchange rate, followed the general crisis of the gold standard after World War I. Irving Fisher proposed a "compensated dollar" system in which the gold content in paper money would vary with the price of goods in terms of gold, so that the price level in terms of paper money would stay fixed.
Inflation data has long signaled Fed policy changes because of a dual mandate that includes price stability. But now, critics argue the central bank may be too tied to the 2% target.
The liberal stalwart from California was right. The path to 2% began with an off-the-cuff comment in New Zealand in 1988. ... week that the 2% inflation target isn't going anywhere ...
Since the mid-trend 1990s, the Federal Reserve's measure of the inflation trend averaged 1.7%, a mere 0.3% shy of the Federal Open Market Committee’s 2% target for overall PCE inflation. Trend inflation as measured by the price index of core personal consumption expenditures (PCE) – that is, excluding food and energy – has fluctuated ...
The path to the Fed’s 2% inflation target was expected to be long and bumpy, and it has been a little choppy the past couple of months, prompting the central bank to take a more cautious ...
Mervyn King became the first Governor to do so in April 2007, when inflation ran at 3.1% against a target 2%. [38] Since 1996 the United Kingdom has also tracked a Consumer Price Index (CPI) figure, and in December 2003 its inflation target was changed to one based on the CPI [39] normally set at 2%. [40]
The Fed’s goal in raising interest rates is to curb inflation enough to hit the target rate of around 2%. According to the Fed, this is an ideal place for inflation to be — good for both ...
The Fed’s favorite inflation gauge—the core personal consumption expenditures (PCE) price index, which excludes more volatile food and energy prices—rose 2.8% from a year ago in March. That ...