# Inflation targets of the major central banks: Fed, ECB, BoE, BoJ, SNB, BoC, RBA and RBNZ

> Most major central banks aim for inflation of about 2%, but the measures and ranges differ. A reference guide to each target, how recent inflation compares, and why the details matter for currencies.

- Canonical URL: https://forextradingcommunity.com/news/inflation-targets-of-major-central-banks/
- Type: Explainer
- Published: 2026-09-13
- Updated: 2026-09-19
- Publisher: Forex Trading Community (https://forextradingcommunity.com), FTC Editorial Team

Inflation targets explain much of what central banks do. When inflation runs above target, markets expect higher interest rates; when it runs below, lower. Knowing each bank's target, and the measure it uses, makes interest rate expectations and currency reactions easier to follow.

## The targets

- **Federal Reserve (US)**: 2% over the longer run, measured by the personal consumption expenditures (PCE) price index.
- **European Central Bank**: 2% over the medium term, measured by the Harmonised Index of Consumer Prices, with deviations in either direction treated as equally undesirable.
- **Bank of England**: 2% consumer price inflation, set by the government in the Bank's remit.
- **Bank of Japan**: 2% consumer price inflation, a target adopted in January 2013.
- **Swiss National Bank**: price stability, defined as consumer price inflation of less than 2% a year; deflation also counts as a breach.
- **Bank of Canada**: 2% total consumer price inflation, the midpoint of a 1–3% range. The current agreement with the government runs to the end of 2026.
- **Reserve Bank of Australia**: consumer price inflation of 2–3%.
- **Reserve Bank of New Zealand**: 1–3% over the medium term, with a focus on the 2% midpoint. Since December 2023 its remit has focused on price stability alone, after maximum sustainable employment was removed as an objective.
- **Norges Bank**: 2%.
- **Sveriges Riksbank**: 2%, measured by CPIF, consumer prices with a fixed mortgage interest rate.

## Recent inflation against those targets

The latest readings show why central banks are moving in different directions:

- **United States**: consumer prices up 3.4% in August 2026; PCE prices up 3.7% in July ([PCE report](/news/us-pce-inflation-july-2026/))
- **Euro area**: 3.2% in August, confirmed on 17 September after a 3.3% flash estimate ([report](/news/euro-area-inflation-confirmed-3-2-percent-august-2026/))
- **United Kingdom**: 3.1% in August ([report](/news/uk-inflation-august-2026-3-1-percent/))
- **Switzerland**: 0.8% in August ([report](/news/swiss-inflation-august-2026/))
- **Norway**: 3.0% headline and 2.7% underlying (CPI-ATE) in July ([preview](/news/norges-bank-riksbank-september-2026-preview/))

## Why the details matter

- **Different measures, different numbers.** US PCE and CPI inflation can differ considerably, and the Fed's target refers to PCE.
- **Ranges give room.** A bank with a 1–3% range may tolerate inflation that would prompt a bank with a single 2% goal to act.
- **Targets and mandates can change.** Canada reviews its agreement every five years, and New Zealand's remit changed in 2023. Changes can shift long-term interest rate expectations.
- **Expectations are part of the picture.** Central banks watch surveys of expected inflation because expectations above target can make inflation stick ([US consumer sentiment](/news/us-consumer-sentiment-september-2026/)).

For how rate decisions feed through to exchange rates, see [how interest rate decisions move currencies](/news/how-interest-rate-decisions-move-currencies/).

## Sources

- [Federal Reserve: Why does the Federal Reserve aim for inflation of 2 percent over the longer run?](https://www.federalreserve.gov/faqs/economy_14400.htm)
- [European Central Bank: monetary policy strategy](https://www.ecb.europa.eu/mopo/strategy/html/index.en.html)
- [Swiss National Bank: the SNB's monetary policy strategy](https://www.snb.ch/en/the-snb/mandates-goals/monetary-policy/strategy)
- [Bank of Canada: inflation-control target](https://www.bankofcanada.ca/rates/indicators/key-variables/inflation-control-target/)
- [Reserve Bank of Australia: inflation](https://www.rba.gov.au/inflation/)
- [Reserve Bank of New Zealand: about monetary policy](https://www.rbnz.govt.nz/monetary-policy/about-monetary-policy)

## Common questions

### What is the Federal Reserve's inflation target?

2% over the longer run, measured by the annual change in the personal consumption expenditures (PCE) price index.

### Which central banks have an inflation target range?

The Bank of Canada targets 2% as the midpoint of 1–3%, the Reserve Bank of Australia targets 2–3%, and the Reserve Bank of New Zealand targets 1–3% with a focus on the 2% midpoint.

### What is the Swiss National Bank's inflation target?

The SNB defines price stability as consumer price inflation of less than 2% a year, and also treats deflation as a breach.

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