Why is the Federal Reserve's inflation target 2%?

Because they want inflation to be low grade theft. At 2% it takes 34 years to dilute the value of the currency by 50%.

On generational timescales, theft becomes quaint. It feels good to reminisce about "the good ol' days" when you could see a movie for a dollar or enjoy a night out on the town for 20 bucks.

Whereas when you remember being able to buy a week's worth of groceries for $100 a few years ago, the memory spurs anger and despair. This is dangerous to the overlords...