What are the goals of the Federal Reserve's review and why undertake it now?

The Federal Reserve is taking a broad and open-minded look at the monetary policy strategy, tools, and communications practices it uses to pursue its congressionally-assigned goals of maximum employment and price stability, known as the dual mandate. With labor market conditions near maximum employment and inflation near its 2 percent objective, now is a good time to consider whether the strategic framework for monetary policy could be improved and is sufficient to meet challenges that could arise in the future.

What specific changes to monetary policy strategy, tools, and communication will the review examine?

Federal Reserve policymakers are approaching the review with an open mind and do not have specific outcomes in mind. They are interested in hearing a broad range of perspectives from outside the Federal Reserve that could prove useful in helping them consider ways to improve the strategy, tools, and communications practices they use to pursue the Federal Reserve’s congressionally-assigned goals of maximum employment and price stability.

Are there any changes to the monetary policy framework that will not be considered?

While the review will be broad, policymakers do not plan to recommend changes to the Federal Reserve's congressionally-assigned dual mandate goals. They likely will examine various strategies for achieving the Federal Reserve’s 2 percent inflation objective over the longer run but do not plan to consider raising or lowering the objective.

When was the last time the Federal Reserve undertook a broad review of its monetary policy strategy?

The Federal Reserve’s monetary policy strategy has evolved considerably over history, but it was first articulated in 2012 with the adoption by the Federal Open Market Committee of the Statement on Longer-Run Goals and Monetary Policy Strategy (PDF). This strategy has worked well. With the economy performing in the neighborhood of the Federal Reserve’s dual mandate objectives, now is the time to step back and consider whether the strategic framework could be improved.

What outside perspectives is the Federal Reserve seeking?

A series of Fed Listens events are planned, including a research conference June 4-5, 2019, at the Federal Reserve Bank of Chicago. Reserve Banks are planning additional public events around the country. A broad range of people with a stake in a healthy U.S. economy with plentiful jobs and low and stable inflation will be invited to participate in Fed Listens events. Participants may include representatives of business and industry, small business owners and entrepreneurs, labor leaders, community and economic development officials, academics, non-profit organization executives, community bankers, local government officials, and representatives of congressional offices.

How will the views offered at Fed Listens events be used in the review?

Reserve Banks will prepare written summaries of the discussions at the events. The summaries will be compiled, submitted to the Federal Open Market Committee, and made public. Discussion questions at the events will be aimed at drawing out information and perspectives that will be relevant for policymakers as they think about the Federal Reserve’s policy strategy, tools, and communications practices. Event participants need not have a detailed knowledge of monetary policy.

When will the review conclude and will the Federal Reserve announce the results?

Beginning around the middle of 2019, the Federal Open Market Committee will begin discussing the perspectives offered during the outreach events as well as research conducted by Federal Reserve economists. The Committee expects to report its findings during the first half of 2020.

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Last Update: June 25, 2019