Following the COVID-19 crisis, the U.S. and Eurozone saw a stark increase in inflation due to supply chain disruptions caused by the pandemic and shifting consumer demand from services to goods. The current rate of inflation in the U.S. is 3.7%, down from an 8% average in 2022, while inflation in the Eurozone is currently at 4.3%, down from 9.2% at the end of last year.

Historically, the Federal Reserve (FED) and the European Central Bank have had an official inflation target of 2%. Though both the U.S. and the Eurozone bloc have managed to decrease inflation from its 2021 and 2022 levels, economists believe closing the gap to reach the 2% target will be a challenging task. Forcing the economy back to a 2% inflation rate will require raising interest rates and could cause significantly higher unemployment.

Jason Fruman, economic policy professor at Harvard University and former Director of the U.S. National Economic Council, has advocated for the FED to increase its inflation target to 3%. He argues a higher inflation target will help cushion the economy against severe recession, help stimulate investment, and prevent widespread layoffs from companies looking to cut costs when the economy slows.

This question will resolve positively if the U.S. Federal Reserve or European Central Bank announces that it is raising its official inflation target above 2% on or before December 31, 2024 .