Blog: The Fed Changes Strategy
Powell talks about more than rate cuts.

When Fed Chair, Jerome Powell, addressed the crowd at Jackson Hole on Friday the media and markets focused on rate cuts. Specifically, will the Fed cut rates in September. Powell basically said that the Fed is more worried about employment than inflation. So the answer is, yes. At least one rate cut is coming.
But most of his speech was about the 2025 Longer-run Goals and Monetary Policy Strategy document which was set to be effective the same date. The last monetary policy strategy document was released just before the pandemic of 2020 and became irrelevant almost immediately. It was geared to the low inflation/low interest rate environment that came after the 2008 Global Financial Crisis, and was expected to persist into the future. As Powell says, that was changed by the pandemic of 2020.
The revised statement has implications for how we should view the path of interest rates going forward and are worth reviewing.