The Inner Monologue

For much of the past few years, inflation has been the bogeyman of American politics and economics. From headlines screaming about rising grocery bills to endless campaign ads warning of runaway prices, the narrative has been clear: inflation is too high, too dangerous, and a threat to prosperity. But that story is increasingly outdated. Inflation today is not only under control—it is exactly where a strong, growing economy needs it to be.

It’s time to recognize that U.S. inflation is low enough.

The Fed’s Target Was Never Zero

The Federal Reserve has long aimed for a 2% annual inflation rate. Why not zero? Because a little inflation greases the wheels of the economy. It allows wages to adjust upward, helps businesses plan, and avoids the deadly trap of deflation, where falling prices choke off spending and investment.

Right now, inflation is bouncing in the 2–3% range, which is historically normal and entirely consistent with the Fed’s mandate. If anything, this is the sweet spot: low enough not to hurt families, but high enough to keep the economic engine running smoothly.

Wages Are Outpacing Prices

The most important measure of inflation isn’t the number on a chart—it’s how it affects real people. In 2021 and 2022, inflation did eat into household budgets. But today, wages are rising faster than prices. Real incomes are up, which means workers are better off than they were during the so-called “inflation crisis.”

If prices were still spiraling out of control, we would see people falling behind month after month. Instead, households are catching up. The story of 2025 is not inflation hurting Americans, but wages finally pulling ahead.

The Global Perspective

Inflation is not just an American problem—it’s a global phenomenon. And by global standards, the U.S. has managed it exceptionally well. Europe, still reeling from energy shocks, has seen more persistent price pressures. The U.K. has wrestled with inflation above 4%. Even major Asian economies have struggled to stabilize.

By contrast, the U.S. sits comfortably in the mid-2% range. Global investors know it, too: bond yields remain steady, stock markets are strong, and the dollar remains the world’s preferred currency. If America truly had a dangerous inflation problem, the world’s capital would not continue to pour into U.S. assets.

Stability, Not Panic

Inflation anxiety is often more political than economic. Rising gas or food prices, even if temporary, get exaggerated into signs of systemic collapse. But long-term stability matters more than month-to-month swings. A spike in beef prices doesn’t mean hyperinflation any more than a temporary dip in rent means deflation.

The bigger picture is clear: inflation has normalized. The panic was justified when inflation soared above 8% in 2022. It is not justified when inflation is holding steady around 2–3%. To continue acting as if the economy is on fire is to fight yesterday’s war.

Why Moderate Inflation Is Good

Some critics argue that any inflation erodes purchasing power. That’s true in the narrowest sense, but misses the broader benefits:

• Encourages spending and investment. If money grows more valuable by sitting idle, people stop buying, businesses stop investing, and growth stalls.
• Allows wage growth. Workers can negotiate higher pay more easily in an inflationary environment than in a stagnant or deflationary one.
• Gives policymakers flexibility. With moderate inflation, the Fed can cut interest rates during recessions. Without it, monetary policy loses effectiveness.

The truth is that zero inflation is not a utopia—it’s a risk. A healthy modern economy needs modest inflation to stay dynamic.

Conclusion: Inflation Is Right Where It Should Be

America’s inflation story should not be one of fear but of success. The economy absorbed a global pandemic, supply chain breakdowns, and energy shocks. It endured a period of real hardship when inflation spiked. But now, the system has corrected. Prices have stabilized. Wages are ahead. And inflation has landed exactly where economists want it to be: low, steady, and manageable.

So let’s stop pretending we’re still in crisis. Inflation is low enough. It’s time to give Americans credit for weathering the storm, and to recognize that what we have now is not a problem to panic over, but a balance to protect.