Federal Reserve to Review Monetary Policy Framework, Maintains 2% Inflation Target, Begins Discussions in January

The U.S. Federal Reserve has announced a comprehensive review of its monetary policy framework, focusing on long-term strategy, communication, and tools used to achieve its goals of maximum employment and price stability. This review will commence with discussions among policymakers at the January Federal Open Market Committee (FOMC) meeting and will include external input through a conference and community events scheduled for May 15-16, 2024. Federal Reserve Chair Jerome Powell indicated that the Fed is open to new ideas and critical feedback during this review process. The review will also maintain the current inflation target of 2%. Meanwhile, the International Monetary Fund is set to evaluate the tariff and tax reduction policies of U.S. President-elect Donald Trump, as details emerge about his economic plans, which could have significant implications for the U.S. economy and potentially prompt the Fed to consider raising interest rates.