#POWELL SPEECH TODAY FULL#

'It is hard to overstate the benefits of sustaining a strong labour market, a key national goal that will require a range of policies in addition to supportive monetary policy,' Mr Powell said. The gathering is normally held in Jackson Hole, Wyoming, but was convened this year online because of the coronavirus pandemic. 'Our revised statement reflects our appreciation for the benefits of a strong labour market, particularly for many in low- and moderate-income communities, and that a robust job market can be sustained without causing an unwelcome increase in inflation,' Mr Powell said as he explained the changes at the start of the Kansas City Fed's central banking conference. All 17 Fed policymakers signed on to the new strategy. The changes acknowledge, the Fed said in its description of its new strategy, that 'downward risks to employment and inflation have increased', and include a new promise to use the central bank's 'full range of tools' to achieve its goals of stable prices and a strong labour market. Mr Powell's new policy blueprint, designed for a world where weak inflation, low interest rates, and slow economic growth appear to be here to stay, puts the labour market front and center. The policy shift is arguably the biggest for the Fed since Paul Volcker remade the central bank into an inflation-slaying force four decades ago, when prices were spiraling higher. What is news, Mr Reinhart said, is that the Fed has now enshrined a degree of tolerance for inflation in its guiding document. 'It's no news that (Fed Chair Jerome) Powell doesn't want to raise interest rates,' said Vincent Reinhart, chief economist at Mellon. The change suggests the US central bank's key overnight interest rate, already near zero, will stay there for potentially years to come as policymakers woo higher inflation. It also promises to aim for 2 per cent inflation on average, so that periods of too-low inflation would likely be followed by an effort to lift inflation 'moderately above 2 per cent for some time.'

#POWELL SPEECH TODAY FULL#

The US central bank's new monetary policy strategy, unveiled at the start of an annual central banking conference, pledges to address 'shortfalls' from the 'broad-based and inclusive goal' of full employment, a nod to research showing racial income disparities hold back economic growth. The Federal Reserve on Thursday rolled out a sweeping rewrite of its approach to its dual role of achieving maximum employment and stable prices, putting new weight on bolstering the US labour market and less on worries about too-high inflation.

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