Powell hinted at "major overhaul" of the monetary policy framework to reconsider the average inflation target regime.

Federal Reserve Chairperson Powell stated that policymakers are considering adjusting the core content of the monetary policy guidance framework, including the way the US job "gap" is described, and thoughts on how to achieve inflation targets. In 2020, the Federal Reserve made two important reforms in guiding the economy: first, allowing inflation to moderately exceed 2% for a period of time after a period of long-term inflation below 2%; second, in periods of low unemployment rates, the Federal Reserve will no longer preemptively raise interest rates to guard against potential inflation pressures, aiming to narrow the "gap" between actual employment numbers and the maximum employment goal. Powell stated on Thursday at a research conference on monetary policy framework, "Officials believe that it is necessary to reconsider the description of the employment 'gap.' In the meeting last week, we also had similar thoughts on the average inflation target strategy."