24 This is a robust evolution in the Federal Reserve’s policy framework and, to me, reflects the reality that econometric models of maximum employment, while essential inputs to monetary policy, can be and have been wrong, and, moreover, that a decision to tighten monetary policy based solely on a model without any other evidence of excessive cost-push pressure that puts the price-stability mandate at risk is difficult to justify, given the significant cost to the economy if the model turns out to be  22 FOMC participants discussed the benefits, limitations, and risks associated with policy tools other than the setting of the federal funds rate target at various points during the review.
In addition to this outreach, a conference planned for January, 2021 will include views from academic researchers on the potential benefits and risks posed by artificial intelligence for banks of all sizes. Technological innovation holds great promise to help community banks compete and succeed in the evolving financial services landscape.