Archive · 23 Aug 2025
Powell Updates Fed Framework, Emphasizes Price Stability
The head of the Federal Reserve, Jerome Powell, changed the way the Fed makes decisions about interest rates.
Instead of focusing on very low rates, the new plan prioritizes keeping prices stable and under control.
This means the Fed is likely to keep interest rates high for longer.
This decision was made after changes in the economy.
The new policy may lead to higher interest rates.
Some officials are waiting for more data before deciding on rate cuts.
Jerome Powell updated the Federal Reserve's operating framework.
The new framework emphasizes price stability, moving away from a low-rate focus.
The Fed removed the 'makeup' strategy, which allowed inflation to overshoot 2%.
Economists anticipate the focus on price stability may lead to higher interest rates.
St. Louis Fed President Musalem stated he needs more data before supporting a rate cut.
- Who
- Jerome Powell, US Federal Reserve Chair.
- What
- Jerome Powell announced an updated operating framework for the Federal Reserve.
- When
- August 23, 2025 (date of article publication).
- Where
- Jackson Hole, Wyoming.
- Why
- To refocus monetary policy on price stability and update the Fed's operating framework.
Rate Cut Discussion
Federal Reserve's Outlook
Interest Rate Trajectory
Rate Cut Discussion
Expectation of near-term rate cuts.
Federal Reserve's Outlook
Focus on price stability may lead to higher rates for longer.
- Speaker
- Jerome Powell, Alberto Musalem
- Event
- Jackson Hole Conference
- Focus
- Monetary Policy, Price Stability
- Framework Update
- Reverts to pre-COVID principles, flexible inflation targeting
- Inflation Target
- 2%
Sources
Powell plans U-turn on an economic strategy that soured
Jerome Powell Speech today LIVE: US Fed Chairman to address his 8th Jackson Hole meet. Here's what is in focus
Jerome Powell signals Fed may cut rates soon even as inflation risks remain
US stocks rally: Dow Jones notches another record high after Powell hints at Fed rate cuts
Jerome Powell Jackson Hole Speech 2025: Key takeaways from Fed Chair’s remarks on inflation, rates, US economy
Fed Chair Powell updates operating framework, returns focus to inflation and price stability
St. Louis Fed’s Musalem says more data needed before September rate cut
