Federal Reserve Chair Jerome Powell plans to roll back key elements of the central bank’s 2020 monetary policy framework, the Wall Street Journal reported, citing people familiar with the matter. The changes—expected to be outlined in Powell’s upcoming Jackson Hole address, his last as chair—would end the Fed’s commitment to let inflation run modestly above its 2% target to make up for past shortfalls and would abandon an explicit bias toward prioritising low unemployment. Introduced when rates were near zero, the 2020 strategy aimed to prevent premature tightening and support the labour market. Critics contend the framework contributed to the Fed’s slow response to the inflation surge that began in 2021, with rate increases only starting in March 2022. The Fed now wants a more flexible approach it believes can better handle simultaneous shocks to prices and employment. The reported pivot comes as policymakers face a tricky backdrop. Benchmark rates are about one percentage point lower than a year ago, yet inflation is running higher, fuelling concerns about a stagflationary mix. Officials gathering in Jackson Hole also must weigh legal challenges and political pressure from the White House as they deliberate the timing and scale of future rate cuts.