Top central bankers, who credit the use of a 2% inflation target with anchoring decades of stable prices, are facing the first full-on test of how well that approach to monetary policy works once prices have erupted, and how strictly they'll enforce it if damage to their economies intensifies.
By announcing an inflation goal, central bankers feel they build credibility for themselves and focus the planning of households and firms in ways that help keep inflation controlled. It's a concept that seemed supported by the facts as the use of inflation targeting spread across the developed world from New Zealand in 1990 through Europe and to the United States and Japan in 2012 and 2013.
Those decades, up to the end of the first year of the coronavirus pandemic in 2020, saw inflation largely contained.