Definition
Sustained increase in the general price level of goods and services, eroding purchasing power. Central banks (including the federal-reserve) target low stable inflation — typically ~2% in the US — using interest-rates as the primary policy tool.
Key Points
- 2026-09-16: Fed cited inflation “too high for too long” in first rate hike since July 2023; PCE cited at 3.7% in 2026 (2026-09-16-fed-rate-hike-cnbc)
- Drivers cited: tariffs, Iran-war energy shock, AI capital spending (2026-09-16-fed-rate-hike-reuters)
- Fed funds raised to 3.75%-4.00%; SEP median 4.1% end-2026 (2026-09-16-us-interest-rates-first-hike-three-years)