The US Federal Reserve on Thursday announced a new strategy to target inflation that averages 2%, focusing on “maximum” employment.
“Following periods when inflation has been running persistently below 2%, appropriate monetary policy will likely aim to achieve inflation moderately above 2% for some time,” according to a press release issued by Fed.
It underlined that maximum employment is a broad-based and inclusive goal, reflecting Fed appreciation for the benefits of a strong labor market, particularly for many in low and moderate-income communities.
The Fed policy decision will be informed by its “assessments of the shortfalls of employment from its maximum level,” rather than by “deviations from its maximum level.”
“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 Powell said during his speech at annual Jackson Hole, Wyoming symposium.
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