FN Marktrapporten


The FED's Framework Review - Evolution Toward Flexibility
DWS
22-09-2020

The Fed's framework review has produced some interesting insights, beyond simply allowing inflation to temporarily run above the two percent target. The new reaction function of the Fed seems to be asymmetric for both, employment and inflation. The new qualitative maximum employment goal still lacks a proper definition and structural challenges ahead could well tilt monetary policy further toward accepting moderate inflation overshoots.