Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Economic Symposium on August 22, 2025, offered insights into the Fed’s updated monetary policy framework. Addressing economic conditions and inflation concerns, Powell acknowledged the need for possible adjustments to policy strategy as risks change in an uncertain market landscape. Market reactions were positive, with major indices showing solid gains as investors interpreted his cautious stance as dovish before the September Federal Open Market Committee meeting. The changes in the Fed’s approach mark a significant shift from the 2020 “makeup” inflation target strategy. The removal of this language signifies that monetary policy is now focused on promoting maximum employment and stable prices across various economic conditions. Powell highlighted the importance of well-anchored inflation expectations to successfully control inflation without triggering significant unemployment. The speech also outlined challenges such as higher tariffs and immigration policies impacting job growth, leading to a slowdown in labor force growth. However, Powell noted that the Fed’s policy rate has moved closer to neutral compared to a year ago, indicating flexibility for adjustments based on economic data and risk assessments. His key message was that