Overview

Target 2%: Easing Inflation in an Uncertain World How should the Fed finish the inflation-reduction job and prepare for the changing world ahead, addressing challenges of tariffs, supply chain ""shocks,"" and changes in the status of the dollar and the nature of international cooperation? Finishing the Inflation Job and New Challenges in Monetary Policy collects essays and discussions from the annual Hoover Institution Monetary Policy Conference, held on May 9, 2025, exploring these themes and considering other big-picture issues that affect monetary policy in this volatile international environment. Each year, the conference brings together academics, policymakers, media members, and others to consider the issues affecting monetary policy, both in the United States and worldwide. In her welcoming remarks to the conference, Hoover Director Condoleezza Rice sets the tone, stating that the United States is ""experiencing an avalanche of uncertainty,"" with everything about the international order in question, including the United States' role in it. With inflation still stubbornly above the Federal Reserve's 2% target at the time of the conference, how to finish the inflation-reduction job was a natural point of focus. But contributors also explore in depth many other challenges and questions on monetary policy that lie ahead: How should central banks counter a new surge of inflation, should one arise? What lessons should we take from the 202122 inflationary episode? Are tariffs the next supply shock? How should central banks adapt their formal strategies, constructed in an era of zero-interest rates and low inflation? How should financial regulation adapt to the uncertainties of geopolitics and the big technological innovations going on around us? This year's conference included a celebration of the life and career of John B. Taylor. Many essays convey this spirit of homage, noting the influence of Taylor and the Taylor rule on policymaking. Among its eight sections, the book proceeds by exploring current issues in finance and the financial regulation of cryptocurrency, the growing role of private credit, and how the history of the price stability objective reverberates in the present day. Monetary policy must adapt to this very new world.

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9780817927141

Table of Contents

Reviews

""Hoover's monetary conferences help crystalize central debates in the field, and the papers in this year's volume offer an important guide for policymakers, academics, journalists, and others trying to understand what has broken and how to move forward."" --Joseph C. Sternberg, columnist, The Wall Street Journal ""At a time when the Fed and its mandate are under intense scrutiny, Finishing the Inflation Job could not be more timely. . . . The contributions here will do much to inform ongoing discussions."" --Barry Eichengreen, George C. Pardee and Helen N. Pardee Chair and Distinguished Professor, Departments of Economics and Political Science, University of California, Berkeley ""Conventional policymaking confronts new shocks and old challenges, while many economists have diminished confidence in traditional models. Assembling diverse expert viewpoints on the current unprecedented challenges, the Hoover Institution moves ahead of the curve."" --Robert G. King, professor of economics, Boston University ""With the challenge of how to get inflation back to target in a timely fashion still unsolved, this work should provide a lasting point of reference for not only practitioners but also anyone interested in the craft."" --Pedro da Costa, head of policy for the Americas, MNI Market News

Author Information

Michael D. Bordo is the Duncan Stewart Distinguished Visiting Fellow at the Hoover Institution; and a Board of Governors Professor of Economics and director of the Center for Monetary and Financial History at Rutgers University. John H. Cochrane is the Rose-Marie and Jack Anderson Senior Fellow at the Hoover Institution, a research associate of the National Bureau of Economic Research, and an adjunct scholar of the Cato Institute. John B. Taylor is the George P. Shultz Senior Fellow in Economics at the Hoover Institution; and the Mary and Robert Raymond Professor of Economics and director of the Introductory Economics Center at Stanford University

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