What does a healthy inflation rate
The Federal Reserve has set the official inflation target at 2%. That's for the core inflation rate. It strips out volatile gas and food prices. It is also the year-over-year rate, not the month-to-month rate. Inflation is often used to describe the impact of rising oil or food prices on the economy. For example, if the price of oil goes from $75 a barrel to $100 a barrel, input prices for businesses will increase and transportation costs for everyone will also increase. This may cause many other prices to rise in response. What is an acceptable level of inflation? The Federal Reserve has not established a formal inflation target, but policymakers generally believe that an acceptable inflation rate is around 2 percent or a bit below.