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On August 27, the Federal Reserve released an important revision to its monetary policy strategy, replacing 2% price inflation targeting - initially adopted in 2012 - with a new approach in which the Fed will target an average inflation rate instead. To quote the Fed’s statement, “following periods when inflation has been running persistently below 2 percent, appropriate monetary policy will likely aim to achieve inflation moderately above 2 percent for some time.” The idea is thus to allow inflation to move above 2% until it averages 2% over some unspecified number of prior