Powell: Employment above sustainable levels does not require tightening policy, the new framework aims to adapt to various economic conditions.

On August 22, Fed Chair Powell stated that the Fed still believes that uncertainty estimates regarding employment exceeding its maximum sustainable level do not necessarily require tightening of policy. If a tight labor market poses a risk to price stability, preemptive action may be necessary. The previous framework placed too much emphasis on specific economic conditions, which may have led to some confusion; the new framework is designed to adapt to various economic conditions.

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