text: This matches the facts much better. The PCEPI inflation rate was above 2% in the most recent month available when the inflation targeting regime was announced. However, after the first four months of 2012, which were all above 2.0%, the PCEPI inflation rate has stayed below 2.0%. For the first 11 months of 2015, inflation was below 1.5%, but otherwise the US Fed has also respected a 0.5% lower bound. There is no reason that the US Fed should have a 2.0% target rate.  Their PCEPI indicator, with its chain Fisher formula has much less upward substitution bias than, say, the Canadian CPI, so strictly on this basis a lower target inflation rate is appropriate.