1) Deflation is seen as much worse, because inflation encourages spending over saving, which drives growth. Targeting, e.g. 0.5% risks missing and going negative.
2) Inflation reduces the true value (cost) of debt. And with $34.5 trillion of it, that’s a big incentive to keep it around.
IMO 2% is clearly too high of a target, but it’s the hamster wheel that makes everyone keep running so not surprising that government spins it too fast.
This is the point that a lot of people miss. Inflation is good for governments as well as businesses who can exploit high inflation to raise prices and shrinkflate products disproportionatly while lowing their wage bills in real terms.
But it inflicts the most suffering on not just the working class, but the sensible/frugal ones who minimize their debt and accumulate some amount of savings rather, but who don't have enough wealth or knowledge to get serious about investing it.
What if this is wrong and being frugal is not sensible?
Absent government intervention in the functioning of markets, being frugal would have paid off way more than it has.
Why do you believe that to be the case? I think you are going with a gut feeling that the world should reward frugality, but if you actually examine that belief, there is no solid science behind it - but he world does not appreciate moral virtues, it does not reward kindness, and other things either.
Unfortunately high inflation penalizes savers by eroding the purchasing power of savings, and it forces all workers on a treadmill where it seems that the cost of living rises faster than many people’s ability to catch up. The only way to beat inflation it seams is to invest in assets such as real estate or stocks, but those squeezed by inflation have little to invest, and these assets are increasingly difficult to obtain due to inflation. I find being on the wrong side of inflation highly demoralizing and upsetting.
(Commented this exact commenting the past, but relevant so doing it again.)
It also helps people with debt, like folks with student loans, mortgages, etc.