2% long-run inflation target is not dead. Fed will just interpret above target as "mean-reverting," updating forecast errors as they go along. This would be completely symmetric w/ how they behaved when undershooting inflation for a decade; see:
Jim Bianco
Jim Bianco12.8. klo 22.25
YoY Core CPI, 3.1% Up 0.3% in the last 3-months In the last 40 YEARS, only once has the Fed CUT rates when core was above 3% AND the 3m chg was >0.3%, Oct 1990 to Mar 1991. Agree with @EpsilonTheory, the 2% infaltion target is dead. We are accepting a higher inflation world.
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