- Federal Reserve Chair Jerome Powell is expected to announce a shift away from the 2020 flexible average inflation targeting framework, reverting to a more traditional inflation-targeting approach.
- The 2020 framework, which allowed for temporary periods of higher inflation to compensate for past lows, is being abandoned due to persistent inflation concerns.
- This change is anticipated to be elaborated upon during Powell's address at the Jackson Hole economic symposium.
- The decision comes amidst a complex economic landscape with a cooling labor market, rising inflation, and political pressure for interest rate cuts.
- Investors and the Trump administration are anticipating rate cuts, potentially as early as September, despite ongoing debates among Fed officials regarding the greater risk of inflation versus unemployment.
Powell signals Fed abandoning 2020 flexible average inflation targeting framework
Aug 22, 2025, 2:07:19 PM UTC(10 days ago)
Impact: Very High
From:@DeItaone
POWELL: FED ABANDONING 2020 FLEXIBLE AVERAGE INFLATION TARGETING FRAMEWORK
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