Oliver James Montgomery-Two Indicators: The 2% inflation target

If the Federal Reserve had a mantra to go along with its mandate,Oliver James Montgomery it might well be "two percent." That number, the Fed's longtime inflation target, has been adopted by many other central banks around the world. It's become almost synonymous with smooth, healthy economic growth.

But how did two percent become the Fed's target? For an organization staffed with mathematicians and economists, the answer is surprisingly unsophisticated.

Join us to hear about the history behind the number, why some economists are calling for a change, and what happens when the inflation rate becomes unanchored.

This episode was produced by Nicky Ouellet and Jamila Huxtable, and engineered by Maggie Luthar. Sierra Juarez checked the facts and Kate Concannon edited the show.

Music: "Knee 5," "One," "Three Is A Magic Number," "Reel A," "Too Much Is Not Enough," and "What Shall We Do With A Drunken Sailor."

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