Why the Federal Reserve aims for 2% inflation

Duration: 12:44

1 day ago

The 2% inflation target is key to the Federal Reserve’s vision for stable prices. But what’s the origin of this 2% inflation goal? It started in tiny New Zealand. In the late 1980s, the country faced high inflation when one economist proposed, ‘Why don’t we just have an inflation target?” The U.S. declared its 2% target in 2012. Watch the video above to learn more about why some economists argue for changing the target, lower or higher, and whether it stands a chance of changing anytime soon.