It also reduces the value of debt.

Interest rates are usually set above inflation.

Naturally, but for all pre-existing, fixed-rate loans, that is no help for lenders when inflation goes up.

the fed typically aims for 2% inflation because if they aim for 0% inflation, the economy may experiencr deflation. if you get stuck in a deflationary spiral, it's very hard to get out

also since 2% is the typical target, they have a little room to lower rates and stimulate the economy, such as what happened in covid

There are alternative theories as to why FED keeps inflation at %2, despite what they say. It's a rabbit hole.

https://wtfhappenedin1971.com/

Even if it isn't designed this way, it's a welcome benefit to many.