Inflation Target Remains Elusive Despite Recent Rate Drop

The recent inflation report showed that consumer prices rose by 3.4 percent from last year, but experts argue this is not good enough.

This rate of inflation may seem like a relief compared to June's 3.5 percent, but it still far exceeds the Federal Reserve's target of 2 percent.

The Washington Post editorial board pointed out that the current 'low' inflation rate of 70 percent above the benchmark has now been above target for 64 consecutive months.

While the difference between 2 and 3 percent may seem small, compound interest can have a significant impact over time. Inflation at 3 percent means the dollar loses half its value in just 24 years, compared to 35 years if inflation were only 2 percent.