Wall Street’s reaction to Tuesday’s consumer price index (CPI) shows investors are realizing inflation is likely to remain higher than the Federal Reserve’s goal for longer. Two heavyweight market voices say the 2 percent target is part of the problem.

“Back in the day, they should’ve said 3 percent instead of 2 percent,” Kenneth Rogoff, a professor at Harvard University and former Fed economist, told Bloomberg Television Tuesday. “If you change it, it means you might change it again. Inflation they’re going to allow to be elevated for longer, but they’re going to say it’s going to get back to 2 percent, it’s just taking longer. That will be the rhetoric.”


Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk

Copyright © 2023 ALM Global, LLC. All Rights Reserved.