The Weekend Brief offers analysis and insights on one big news item of the week, delivered only to Quartz members.
Federal Reserve Chair Jerome Powell has an itch he just can’t seem to scratch, a 2% inflation target. But why does this number mean so much?
The Fed has used this 2% goal as its benchmark for years. There are those who are skeptical about the target and believe it’s a purely political number, rather than a goal based in economics. But Powell says 2% gives the central bank the power to withstand a downturn.
The Weekend Brief digs into the science behind a 2% inflation rate, how consumers react to inflation rates, and why getting too close to 2% could actually do more harm than good.
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