The Federal Reserve has news again!!!

The Federal Reserve is about to unveil the "new framework" on Friday—explaining the soaring inflation, ample job openings, and uncertainty becoming the slogan of the past five years.

It's hard to understand.

The current framework was released in 2020, during the "global pandemic outbreak." At that time, the Federal Reserve suggested not to rush to raise interest rates just because inflation was showing some signs; we should prioritize making the job market broader and more inclusive. In other words, the concern back then was about "insufficient employment," not "excessive inflation." But after the pandemic, inflation soared to a 40-year high, and the strategy of "tolerating high inflation to preserve employment" completely backfired.

Now, times have changed:

2020 → Inflation was too low, the economy was weak for a long time.

2025 → Inflation is relatively high, interest rates have room, and the Fed's concerns have changed.

So Powell now has to tell people: "Stabilizing prices is the prerequisite; with price stability, we can achieve long-term, widespread employment prosperity."

This is a speech upgrade: it seems not to abandon the employment target, but in essence, it puts anti-inflation as the top priority—Trump might not like hearing this, as it means "rate cuts need to be cautious."

The new framework is likely to be:

Not completely abandoning the 2020 notion of "inclusive employment" (after all, it sounds good politically).

But it will be clearly emphasized: we must control inflation first before we can talk about stabilizing employment.

A bit of a return to the pre-pandemic "classic inflation targeting" → More directly focusing on 2% inflation.

This "framework reboot" is essentially providing a narrative step for the Federal Reserve: inflation remains high, and the goal has shifted to "first put out the fire, then talk about development." It's not just a "framework reboot"; it's a narrative reset—the new framework means the Federal Reserve will only gradually lower interest rates, rather than turning on the tap all at once.