Jefferson Argues Against Raising Fed's 2% Inflation Goal

The video discusses the Federal Reserve's dual mandate of promoting maximum employment and stable prices. It highlights the risks of monetary policy being either too restrictive or not restrictive enough to achieve the 2% inflation target. The debate over raising the inflation target is examined, with concerns about reputational costs and the potential benefits of alternative strategies like supervisory policies. The video concludes by questioning the stability of prices with higher inflation targets.

How might a higher inflation target affect the Federal Reserve's reputation?

What alternative strategies could the Central Bank use to address severe recessions?