Core Viewpoint - The Federal Reserve's monetary policy framework has evolved significantly since the establishment of the "Consensus Statement" in 2012, with major revisions in 2020 and 2025, reflecting responses to changing economic conditions and challenges [1][2][4]. Group 1: Evolution of the Framework - The "Consensus Statement" has undergone two major revisions since its inception: the first in 2020 introduced an average inflation targeting and employment gap rules, while the second in 2025 reverted to a more balanced dual mandate approach [2][3]. - The 2025 update removed the emphasis on the effective lower bound (ELB) as a defining feature of the economic landscape and abandoned the average inflation targeting strategy, returning to a traditional symmetric inflation target [3][4]. Group 2: Underlying Logic of the Framework - The evolution of the Federal Reserve's framework is a dynamic response to the primary economic contradictions of specific stages, adapting to the economic environment post-2008 financial crisis and the subsequent low-growth, low-inflation context [4]. - The 2025 revision is a response to the post-pandemic economic landscape, characterized by global supply chain disruptions and structural labor market shortages, indicating a shift away from the low-inflation era [4]. Group 3: Short-term vs Long-term Policy Divergence - The revised framework shows a clear divergence in the Federal Reserve's short-term and long-term policy orientations, balancing risks associated with economic cycles [4]. - Long-term strategies focus on normalizing policy tools and anchoring inflation at a 2% target, while short-term strategies prioritize employment stability and risk management [4]. Group 4: Implications for Domestic Policy - The evolution of the Federal Reserve's monetary policy framework offers valuable insights for domestic reforms, emphasizing the need for continuous optimization of monetary policy to align with the dynamic nature of the real economy [5][6]. - It highlights the importance of forward-looking approaches in policy design, avoiding linear extrapolation from past data, and ensuring adaptability to structural changes in the economy [6]. - The framework should be tailored to local economic characteristics, considering factors such as development stage, economic structure, and financial market maturity [6].

Core Insights - The Federal Reserve's monetary policy framework has evolved significantly since the establishment of the "Consensus Statement" in 2012, with major revisions occurring in 2020 and 2025 to adapt to changing economic conditions [1][2][4]. Summary by Sections Establishment of the Framework - The "Consensus Statement" was first established in 2012, laying the foundation for inflation targeting and balancing dual mandates of maximum employment and price stability [2]. - Key components included a commitment to transparency, proactive policy measures, a defined inflation target of 2% for personal consumption expenditures (PCE), and a focus on maximum employment levels [2]. 2020 Revision - The 2020 revision introduced an average inflation targeting framework and employment shortfall rules to address the constraints posed by the effective lower bound (ELB) on interest rates [3]. - This revision marked a shift from traditional inflation targeting to a long-term average approach, allowing for temporary overshooting of inflation targets [3]. 2025 Revision - The 2025 revision marked a return to a more balanced approach, discarding the average inflation targeting and employment shortfall rules established in 2020 [4]. - The updated framework re-emphasized the dual mandate, reinstating the original inflation targeting strategy and removing the emphasis on the ELB as a defining economic characteristic [4]. Underlying Logic of Framework Evolution - The evolution of the "Consensus Statement" reflects a responsive approach to the primary economic challenges of specific periods, adapting to the dynamic economic landscape [5][10]. - The 2025 adjustments were a response to significant changes in the economic environment post-pandemic, including global supply chain disruptions and rising inflation [10][11]. Implications for Future Policy - The revisions indicate a long-term focus on normalizing monetary policy while balancing short-term risks related to employment and inflation [13][16]. - The return to traditional inflation targeting is expected to enhance inflation expectation management and improve policy transparency [16]. Lessons for Domestic Policy Frameworks - Continuous optimization of monetary policy frameworks is essential to ensure alignment with the evolving real economy [18]. - Future frameworks should be forward-looking and adaptable to structural changes in the economy, rather than relying solely on historical data [18].