This month’s inflation reading shows progress in the Federal Reserve’s efforts to bring inflation down to its 2% target, but there is still more work to be done. In June 2022, the headline inflation number was 9.1% year-over-year, the highest it had been since 1981. Since then, inflation has decreased due to higher interest rates and less stimulus spending from the Covid-era. Inflation has stabilized around 3% since mid-2023, which is still above the Fed’s target but a significant improvement from previous years.
These efforts have not gone unnoticed, as the Federal Reserve can acknowledge a small achievement in their goal to lower inflation rates. While they are not quite ready to declare “Mission Accomplished,” the progress made so far is a positive sign. By implementing strategies such as raising interest rates and scaling back stimulus spending, the Fed has been able to bring inflation rates down from the highs of previous years. This demonstrates that with continued effort and vigilance, the Fed can work towards achieving their inflation target of 2%.