Itās not an upper target, itās the target.
Iām not sure what people youāre talking about for whom it āfeels right.ā The bankers who use it to plan for their long term financial deals for estimating profitability? The exporters who expect to sell their wares for more? Equity owners for planning their ROIC? The worker saving their wage?
The ministers actually preferred a target of 0% to 1% (even closer to gold) and saw 2% as high, but politicians wanted more leeway and pressured them to push it up to 2% and eventually we ended up with the ECB "averaging 2%" in the mid-term, which allowed for inaction at 4% and led to the recent inflation break-out.
Since inflation rates were well above 2%, at the time, targeting 2% still resulted in a decrease, so the ministers went along with it and just stayed quiet when it crept below that, until it slipped into ZIRP and everyone started getting crushed by their debt. Then they reversed and it overshot in the other direction.
Fiat is simply not a commodity, so it needs to be tied to a commodity or replaced with one, or it'll always have these problems.
https://sites.lsa.umich.edu/mje/2023/09/04/why-the-2-inflation-target/
