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its from WSJ so its possible the columnist has even less idea of what theyre talking about than I do
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. . . what on earth https://fredblog.stlouisfed.org/2020/11/from-inflation-targeting-to-average-inflation-targeting/ …
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basically changing their mandate (and it's absolutely a change) to average inflation over [undefined] period lets them justify almost any level of inflation, based on the window they use to define the average.
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it's a way to feign control and claim that "we meant for this to happen," when of course inflation is already running hotter than they expected and will continue to surprise to the upsidepic.twitter.com/z677YeSq0p
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The idea is not to run hot. It's to anchor expectations *at* 2%, rather than less. Credibly commit to overshoot when under 2%, and inflation will be 2%. Treat it as a ceiling, it'll be <2%. The issue is undershooting from 2010 to 2020, not from 96 to 21https://www.econlib.org/does-the-fed-treat-2-inflation-as-a-ceiling/ …
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Higher inflation maybe good anyway soo
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