Since the beginning of this year, the U.S. economy has shown resilience, with the labor market nearing full employment but job growth slowing to an average of 35,000 per month, and the unemployment rate stabilizing at 4.2%; inflation has been pushed up by tariffs, with core PCE inflation at 2.9%, but long-term expectations remain anchored. Policy faces risks of rising inflation and declining employment, necessitating a balance of dual objectives. The Federal Reserve has revised its monetary policy framework, removing the focus on ELB and compensatory strategies, emphasizing the achievement of goals in a broad context, maintaining a commitment to 2% inflation and a five-year assessment cycle.

📌 Key Points

The synchronized slowdown in labor supply and demand increases the risk of declining employment, tariffs push up inflation but long-term expectations are stable.

Monetary policy needs to cautiously balance the risks of rising inflation and declining employment, adjusting restrictive positions.

The Federal Reserve's framework revision eliminates compensatory strategies, emphasizing the balance of dual objectives and broad applicability.