Morning Distribution for Thursday, March 9, 2023

A [FiveThirtyEight]( email [Morning Distribution]( Thursday, March 9, 2023 Your daily briefing from FiveThirtyEight --------------------------------------------------------------- The Morning Story [2-PERCENT-INFLATION-4×3]( [The Fed’s Inflation Goal Is Completely Arbitrary]( By [Santul Nerkar]( Over the past 18 months, inflation has dominated our understanding of the pandemic economy. Americans have endured the highest yearly price increases in four decades, from [soup]( to [nuts]( — literally. Even now, as experts and forecasters [worry that the economy might dip into recession]( observers also remain dismayed about the relative stickiness of inflation. Through it all, we’ve heard an almost mantra-like refrain [from the Federal Reserve]( We’re still not close to 2 percent inflation. It might seem odd, then, that this ostensibly carefully crafted rule of monetary policy, the goal of arguably the [most powerful technocrats]( in the world, is sort of … arbitrary. In fact, there’s [little empirical evidence]( to suggest that a long-run inflation target of 2 percent is the platonic ideal for balancing the Fed’s “dual mandate” of price stability and maximum employment. So as the Fed continues to raise interest rates with the stated goal of bringing us back down to 2 percent inflation, it’s worth reexamining this long-held “rule of economics.” Despite its widespread acceptance, there’s a strong case that we should understand it as [a product of history]( — and relegate it to the dustbin accordingly. [Why is 2% the Federal Reserve’s magic number for inflation? | FiveThirtyEight]Why is 2% the Federal Reserve’s magic number for inflation? | FiveThirtyEight [Read more]( --------------------------------------------------------------- Weekly Listen [Play]( [Politics Podcast: The Poll That Ended Dilbert]( [FiveThirtyEight] [View in browser]( [ABC News]( [Unsubscribe]( Our mailing address: FiveThirtyEight, 47 West 66th Street, New York, NY 10023.