Do you think the 2% inflation target should be scrapped. >> I don't think it should be scrapped. I think it should be changed.I have been of the view that a better inflation target is a range, not a point estimate. A point estimate suggests precision that is elusive. Second, that range should be higher than 2%.It should be the two and a half to 3%. What is undeniable is that we are at a stable 3% inflation and that hasn't in any way unanchored inflationary expectations. ...

Core Viewpoint - The Federal Reserve's policy decisions may be influenced by the current high stock market performance, with discussions among Fed officials about whether financial conditions are too restrictive or not [2][5][6]. Group 1: Federal Reserve's Perspective - The New York Fed President John Williams indicated that he does not believe the markets are being restricted, suggesting a focus on credit markets rather than equity markets [2][3]. - There is a significant debate within the Fed regarding the restrictiveness of current monetary policy, with some members advocating for further rate cuts while others are more cautious [6][9]. - The minutes from the Fed's meetings show a roughly even split among members on the desire to ease monetary policy, with some members indicating a preference for two more rate cuts this year [7][9]. Group 2: Economic Indicators - The Atlanta Fed's growth estimate of 3.8% for the quarter coincides with the stock market reaching an all-time high, complicating criticisms of the Fed's monetary policy [4][5]. - Current economic conditions are characterized by low spreads and yields in credit markets, indicating that financial conditions may not be as tight as perceived [3][5]. - There are concerns about inflationary pressures as businesses work through inventory accumulated in anticipation of tariffs, which may challenge the Fed's goal of reaching a 2% inflation target [10][11].