Why shouldn’t Fed aim for 0% inflation? Analyzing pros, cons of lower interest rates
The Fed has stated on numerous occasions that its goal is an annual inflation rate of 2%. This is close to the inflation rate prior to the pandemic. However, the Fed’s stated goal raises the obvious question – why stop at a 2% inflation rate? Why not go to zero price inflation, or even better, why not have a goal of negative inflation, meaning prices are falling?
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