One of the disadvantages of inflation targeting is that the Fed could lose credibility is the U.S. inflation rate deviates substantially from the Fed's target inflation rate.

Question

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If the Fed consistently fails to achieve its inflation target, it could weaken the public's trust in the Fed's ability to control and stabilize the economy. This could lead to a loss of credibility and make it harder for the Fed to effectively communicate its policies and actions to the public.

One of the Disadvantages of Inflation Targeting Is That the Fed