The Impossible Two Percent: Why Central Banks Cannot Afford Price Stability
2nd December 2025
The Two percent inflation target—monetary policy’s sacred commandment for three decades—has become structurally impossible to achieve. Not because central bankers lack skill, but because every attempt to hit the target destroys the financial architecture that previous monetary expansion built. This is the endgame of central planning: a system that cannot tolerate its own success criteria without collapsing.
In fact, having a two percent inflation rate means accepting that your money will inevitably become more and more worthless year after year. That’s like accepting the fact that you have a disease that makes you less and less healthy year after year. The end point of either process is obvious and accepting that as a normal state is stupid.