Under the new approach, laid out in a fresh statement on the Fed's longer-run goals and monetary policy strategy approved by all 17 of its policymakers, the US central bank will seek to achieve inflation averaging 2 per cent over time, offsetting below-2 per cent periods with higher inflation "for some time," and to ensure employment doesn't fall short of its maximum level.
“Our revised statement reflects our appreciation for the benefits of a strong labour market, particularly for many in low- and moderate-income communities, and that a robust job market can be sustained without causing an unwelcome increase in inflation,” Fed Chair Jerome Powell said in prepared remarks for a speech explaining the changes.
With the US economy in a deep economic crisis and just months before Americans vote in a contentious election, the Fed's new approach is both an acknowledgment of fundamental changes in the economy that began well before the pandemic, and a map for how the Fed plans to conduct policy in a world where weak growth, low inflation and low interest rates are seen as here to stay.
Dow erases losses for 2020, jumps 200 pts with a boost from Fed
Stocks rose on Thursday after the Federal Reserve unveiled a new framework that could keep interest rates lower for a longer period of time. The Dow Jones Industrial Average gained 210 points, or 0.7 per cent in intra-day trade. Those gains erased the 30-stock average’s losses for 2020. The S&P 500 climbed 0.3 per cent and the Nasdaq Composite marginally higher. Agencies
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