Why 2% Is the Fed’s Magic Inflation Number | WSJ

Inflation is slowly easing, but it’s still far from the Fed’s 2% goal.

WSJ’s Nick Timiraos explains how 2% became the Federal Reserve’s sweet spot, what happens when the U.S. economy strays too far from it, and how a key strategic policy called "anchoring" helps manage the central bank's economic expectations.

0:00 The Fed has a long way to go to get inflation down to 2%
0:37 History of controlling strategic inflation goals
1:59 Why is exactly 2% inflation the Federal Reserve’s goal?
4:25 Is setting a targeted inflation rate an effective monetary policy?

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