by joeyang043
Let me give an extreme example. A pizza is priced at $10 two years ago. One year later, it is priced at $1000. The yoy inflation is ~10000%. Another year later, the price drops to $990. The yoy inflation is -1%.
According to Fed, it is a total victory. Inflation is under control. Everything is back to normal, nothing to worry about.
But is it really? Can you now afford $990 pizza just because inflation is negative.
By Fed’s prediction that inflation rate goes back to 2% in 2025. Lets assume they can succeed (many doubt), everything will be >40% more expensive than pre-pandemic. Is our wage increased by that much? And we have to cheer what a successful job the Fed has done.
Tldr: inflation target is just a scam.