Inflation targeting
A monetary regime in which the central bank publicly names an inflation goal and subordinates the policy rate to it.
How to read the number
The point of the regime is not the number but the anchor it gives expectations: if the goal is believed, wage and price demands adjust to it on their own.
When the metric lies
Under this regime the exchange rate stops being a target and becomes a floating variable — a deliberate trade-off, not a failure of policy.
Also known as: inflation target regime