The risk would be that if inflation started getting increasingly higher, again, not just high at seven % relative to say, over the last two years, but seven and rising. Syour suggests if they would start to raise it gradually now, i shul have done it before, ut, but it's not too late. They codstart raising gradually now and have a softer landing to a lower rate of inflation in the future.
What's so bad about rising inflation? Why should we aim for a rate of 2 percent? Why is it a problem if interest rates are too low--and what do we mean by inflation, anyway? Stanford University's John Taylor talks with EconTalk host Russ Roberts about these questions, the Taylor Rule, why inflation is rising, and what the Fed should do about it. At the end of the conversation, Taylor discusses whether stimulus stimulates and the dangers of the national debt.