Bloomberg Surveillance · Monday, September 28, 2026
Bob Michael suggests that the Federal Reserve's inflation objective may be around the mid-2% range, rather than strictly 2%. He argues that a 2% target is too low for an economy of the U.S.'s size and complexity, potentially leaving parts of the economy behind.
“I don't think their inflation objective is 2%. I think the inflation objective is mid twos. I think what we learned from the pre-COVID era that a 2% target is too low, hence the flexible average inflation targeting regime that Powell wanted to put through. If you target 2%, you expose yourself to too many times to 1.6%, 1.7%, which for an economy the size and complexity of the U.S. is too low. It makes too great a part of the economy feel like they're left behind, left out.”