[bornfreddy]

The cynic in me is certain that inflation, among other things, is a tool for lowering peoples' wages. Not in numbers, but in value.

[usefulcat]

It also reduces the value of debt.

[HPsquared]

Interest rates are usually set above inflation.

[usefulcat]

Naturally, but for all pre-existing, fixed-rate loans, that is no help for lenders when inflation goes up.

[spencerchubb]

the fed typically aims for 2% inflation because if they aim for 0% inflation, the economy may experiencr deflation. if you get stuck in a deflationary spiral, it's very hard to get out

also since 2% is the typical target, they have a little room to lower rates and stimulate the economy, such as what happened in covid

[Aerbil313]

There are alternative theories as to why FED keeps inflation at %2, despite what they say. It's a rabbit hole.

https://wtfhappenedin1971.com/

[redblacktree]

Even if it isn't designed this way, it's a welcome benefit to many.