The Federal Reserve needs to update its thinking on inflation

It’s time for the Federal Reserve to join the 21st century.

For years, the central bank has lamented that inflation is running below the 2 percent level desired by its antiquated model.

Last week, Fed chief Jerome Powell said in the latest Fed board minutes that the bank ties future rate hikes to inflation, which has stayed low for years and remains in a comfortable zone for the Fed, despite a strong, growing economy that produced 300,000 jobs in each of the last two months.

You could almost hear the incredulity generated by his comments, since he is relying on outdated models.

Today’s economy is dominated by technological innovation and efficiencies. Just ask the taxi driver displaced or earning less due to Uber and Lyft.

Or query the consumer, who saves money and gets a better experience.

Look at companies like Walmart and Amazon, which millions of Americans turn to daily to buy items online — and for competitive prices.

In a click, you saved money on gas and secured yourself a great price.

Today’s economy has its own built-in inflation immunity system — it’s called technology. It makes things faster, more efficient and far more accurate on a massive scale.

That is why Ben Bernanke, Janet Yellen and now Powell never found the inflation the Fed believes will rear its ugly head any moment now.

And that is why I believe the Fed should take the time to reconstitute its board — or create a new board of  advisers — incorporating technology industry executives. Their understanding of tech efficiencies would benefit the bank greatly.

The Fed’s level of understanding of the economy would almost certainly rise, and with it, perhaps, its tolerance for an inflation rate above the arbitrarily set 2 percent target.

A little inflation is probably beneficial to keep the economy growing. It also should be viewed as acceptable by the Fed, because workers are just now catching up after decades of stagnant earnings.

New blood just might help the Fed understand the new dynamics of inflation, and put its fears to rest.

Because once it better understands the technological displacement and the levels of efficiency and productivity that technology provides, it may just get comfortable with a higher inflation level — a level that befits the 21st century economy.

Getting better by getting smarter is the mantra that would help the Fed, American workers and the economy at large.