Yahoo Finance-Fed's Williams: The Fed has its 'work cut out' bringing down inflation

[progree]

7. There was 3.5% inflation for several months. The Fed target is 2%

It looks to me like they were serious about the 2% inflation target that they have long espoused.

Below is a graph of the Federal Reserve's target interest rate and the CPI from 4/1998 to 12/2001


# CPI: https://data.bls.gov/timeseries/CUSR0000SA0
(In "More Formatting Options" at the upper right one can change/add 2 month, 3 month, 6 month, and 12 month rolling averages, as well as show the 1 month changes. All with graphs.

# Fed Funds Target Rate (until 2008) -- https://fred.stlouisfed.org/series/DFEDTAR
  (Context: it spent most of late 94 to late fall 98 at above 5%),

Per the NBER, the recession began March 2001.

I suspect likewise that nowadays the Fed is serious about the 2% target, but mindful of not crashing the banks. Core PCE is well over 4% on a rolling averages basis. https://www.democraticunderground.com/10143053501#post5

I'm frankly surprised that so many think the Fed is going to let inflation sit at more than twice their target rate, and that the 2% target is just for shits and giggles.

A 3.5% inflation rate (the peak plateau level shown in the above graph) may not be red-hot, but it's enough to cut the purchasing power of the dollar in half in about 20 years, and down to a quarter in 40 years.

On "Cartering" Biden -- Carter nominated Paul Volcker to be Fed Chair in July 1979, knowing full well what Volcker was going to do.