Comment by nr378

The Federal Reserve targeting "price stability" literally does mean that they target prices increasing exponentially by an average of 2% per year[1]. The mathematical form is P(t) = P₀(1.02)ᵗ, where P₀ is the initial price level and t is time in years.

[1] https://www.federalreserve.gov/economy-at-a-glance-inflation...