Disinflation Forever!

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"Disinflation Forever!"

On the subject of targeting the forecast, via Mark Thoma the Cleveland Fed has a nice chart of the evolution of inflation expectations over time:

This looks to me like expected inflation was undesirably high in the first half of the 1980s, so the monetary authorities took steps to bring it down. And then they just . . . kept on taking steps to bring inflation expectations down. Why do this? Was there some big problem in 1997 that we had to solve? Or 2002? The trend here is subtle enough that you can miss it, but implicitly American monetary policy seems to be consistently disinflationary without specifically articulating this goal or offering a reason for it.

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