Nobel economist Paul Krugman says inflation doesn't need to get down to 2% and the Fed can back off because people have stopped caring
That's still above the Fed's long-run inflation target of 2% – but that target was arbitrary to begin with, Krugman said, and the number was largely drawn to give central bankers leeway to lower interest rates in the event of a recession. Inflation around 2% would prevent interest rates from hovering near the zero lower bound, according to a 2000 paper.
And data shows that people may already be moving on from the topic: the 12-week moving average of Google searches for"inflation" has been on the decline since August of last year. That will dip even lower as grocery prices continue to fall, Krugman predicted.
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