As you know, the Fed has recently stated that it will allow inflation to run at more than 2% for a while once the economic crisis is behind us.
But this might be a dangerous game to play for the Fed.
Let's see why.
The Fed has already been trying to hit its 2% inflation target for years with very little success.
Even the FOMC (Federal Open Market Committee) members do not seem to believe the Fed can pull it off, as Jeff Cox wrote for CNBC:
"None of the 17 officials on the Federal Open Market Committee see inflation breaking the 2% barrier through at least 2023. That means that the current near-zero short-term rate environment likely will persist for years before any change in the current structure would occur."
So what will the Fed change to succeed this time?
We can't predict the future, obviously, but if they start using every possible weapon in their arsenal to break the curse, the risk of them shooting way above the 2% target will be high.
In which case, we could very well find ourselves on the verge of the greatest price inflation in modern history.
So, will you wait to see what the Fed does next, or will you start preparing a little just in case?
