THE FED’S FAILURE TO PROJECT INFLATION

Key Points:

  • For the last decade, the Federal Open Market Committee (FOMC) has set itself an inflation target of 2% — a goal it has extraordinary power to control.
  • Yet, year after year, the FOMC has never successfully delivered on that target.
  • In December of 2020, the FOMC projected inflation would be 1.8%.
  • After Congress passed a massive stimulus bill in March, it raised its forecast to 2.4%.
  • CPI actually rose 4.5%.
Source