The Federal Reserve to Review Monetary Policy Framework

The U.S. Federal Reserve announced on Friday that it will host a conference on May 15-16, 2025, along with a series of public events titled “The Fed Listens” across the country.

These initiatives are part of a review of its long-term strategy and approach to monetary policy.

This “framework review” marks the second of what is intended to be a recurring five-year examination of the Fed’s overall monetary policy strategy. While discussions among policymakers will begin in January, the review will also seek external insights through the conference and community events.

“We are open to new ideas and critical feedback, and we will take lessons from the last five years to adapt our approach where appropriate, ensuring we better serve the American people, to whom we are accountable,” said Fed Chair Jerome Powell in a statement.

Inflation Target Left Out of the Spotlight

Notably, the Fed clarified that its 2% inflation target “will not be a focus of the review,” which may disappoint some academics and analysts who view the fixed inflation target—and its current level—as a challenge for the central bank.

The last framework review, conducted in 2019, led to changes in 2020 emphasizing employment goals and tolerating periods of higher inflation to offset times when it had fallen too low. This adjustment was aimed at addressing persistently low inflation during the 2010s and the early pandemic years.

However, critics argue that this approach, and how it was implemented, may have delayed the Fed’s response when inflation began to rise sharply in 2021.