“This change may appear subtle, but it reflects our view that a robust job market can be sustained without causing an outbreak of inflation,” Fed Chair Jerome H. Powell said Thursday.
Federal Reserve Chair Jerome H. Powell on Thursday announced a major shift in the way the central bank aims to achieve maximum employment and stable prices, marking lessons learned from the most recent economic expansion.
The new approach signals that the Fed won’t increase interest rates to respond to low unemployment levels and also won’t worry as much about low rates triggering a rise in prices.
Speaking at the Fed’s yearly economic policy symposium in Jackson Hole, Wyo., Powell emphasized achieving full employment. As the Fed debuted a long review of its monetary policy framework, the Fed concluded that inflation could temporarily run a bit over its 2 percent target if that means more Americans stay in the workforce. Continue reading.