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It is because the fresh Government Put aside provides focused perhaps not no inflation, but a low, secure rates out of rising cost of living—anywhere between 1987 and 1997, the pace away from rising cost of living are around 3.5%, and you will ranging from 1997 and you may 2007 it absolutely was around dos%. The new Federal Set aside tightened up the money also provide and you will inflation try considerably lower in the new eighties, and hence the value of the new You.S. money stabilized. It was mostly because of the prevailing monetary take a look at in the date you to inflation and you may genuine monetary progress was connected (the newest Phillips curve), thereby rising cost of living try considered relatively safe.

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