average inflation targeting

Feature image explaining average inflation targeting, showing core PCE inflation against the Federal Reserve’s 2 percent target band, the 2020 AIT framework shift, and the post-2021 inflation overshoot.

Central Banking

Average Inflation Targeting: How the Fed Replaced Strict 2 Percent in 2020

Average inflation targeting is the framework the Fed adopted in 2020 to address persistent inflation undershoots and the lower-bound constraint....

May 25, 2026