A Serious Plan to Generate 0.2% Annual Inflation

Click to enlarge.

Set the Fed Funds rate at 0% and then patiently wait for the next recession! Oh, and don't forget to mention the word "taper" often!

Genius!

I'm either half-joking or half-serious. Even I don't know!

Seriously, I don't know. I don't think the Japanese knew. Come to think of it, I doubt Bernanke does either. Does anyone know? What happened the last time the Fed Funds rate was set at 0% for more than 4 years? Surely someone must know.

The plan to get to 0.2% inflation might work, right? That's what the formula in the chart says. Not saying it will work. Not saying it won't. Just saying it might.

This is not investment advice.

Source Data:
St. Louis Fed: Custom Chart