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 is expected to lower policy interest rates soon, but will proceed with caution [1] - Jerome Powell's recent speech at the Jackson Hole annual symposium met market expectations [1] - The Fed has reiterated its commitment to its dual mandate while making only minor clarifications to its monetary policy framework [1]

Core Viewpoint - Gold prices in Asia have slightly declined ahead of the Jackson Hole symposium, with spot gold down 0.2% to $3,343.43 per ounce. The market is anticipating insights from Federal Reserve Chairman Jerome Powell's speech regarding the central bank's monetary policy framework, particularly concerning potential support for interest rate cuts in September [1]. Group 1 - Spot gold has decreased by 0.2%, currently priced at $3,343.43 per ounce [1]. - The Jackson Hole symposium is set to begin on Thursday, with significant attention on Powell's upcoming speech [1]. - Analysts expect Powell's remarks to provide new perspectives on the Federal Open Market Committee's support for interest rate cuts in September [1]. Group 2 - Higher interest rates maintained for an extended period typically diminish the appeal of non-yielding gold [1].

Core Viewpoint - The article discusses the evolution and reform of the Federal Reserve's monetary policy framework in response to rising inflation and economic conditions post-COVID-19, highlighting the need for reassessment and potential changes to better achieve its dual mandate of maximum employment and price stability [1][21]. Group 1: Evolution of the Federal Reserve's Monetary Policy Framework - The Federal Reserve's monetary policy framework is established by the "Federal Reserve Act," focusing on dual goals of maximum employment and price stability, with significant autonomy in its design and implementation [2][3]. - The initial framework, released in January 2012, prioritized price stability, setting a long-term inflation target of 2% based on the Personal Consumption Expenditures Price Index (PCEPI) [3][4]. Group 2: Changes in Economic Environment - Post-2012, the U.S. economy faced below-potential growth and signs of long-term stagnation, leading the Fed to lower its long-term GDP growth forecast from 2.5% in 2012 to 1.8% in 2016 [4]. - The overall interest rate trend declined, with the Fed reducing its estimate of the neutral federal funds rate from 4.25% to 2.5%, limiting its ability to lower rates during economic downturns [4][5]. Group 3: Reassessment and Reform of the Framework - In 2019, the Fed initiated a comprehensive review of its monetary policy framework, which was further influenced by the economic impact of the COVID-19 pandemic [6][7]. - Key adjustments included redefining the 2% inflation target as a flexible average inflation target (FAIT) and shifting focus from "deviating" from maximum employment to addressing gaps below maximum employment [7][8]. Group 4: Limitations of the Current Framework - The current framework allows for a 2% inflation target to be achieved under asymmetric conditions, but the assumption that inflation below 2% is the new normal has proven incorrect [10]. - The framework's reliance on past employment conditions to adjust policy may lead to delays in response, as seen in the Fed's decision-making during periods of rising inflation [13][14]. Group 5: Impact of the Framework on Recent Inflation - The Fed's historically accommodative monetary policy, including lowering rates to 0-0.25% and implementing quantitative easing, contributed to significant inflation increases post-pandemic [15][16]. - The transition from high unemployment and low inflation to low unemployment and high inflation highlighted the inadequacies of the current framework, as the Fed maintained low rates despite rising inflation [16][17]. Group 6: Future Prospects for Monetary Policy Framework Reform - The limitations of the current framework have raised concerns about the effectiveness of U.S. monetary policy and the stability of the bond market, prompting legislative scrutiny and potential reforms [21][22]. - The establishment of a congressional working group indicates a bipartisan interest in reassessing the Fed's dual mandate and decision-making processes, which may lead to significant changes in the monetary policy framework [23][24].