The new statement on goals and strategy seeks to align monetary policy with key longer-run changes in the economy. 12 The combination of a low neutral interest rate, underlying trend inflation The new statement is available on the Board’s website at https://www.federalreserve.gov/monetarypolicy/files/FOMC_LongerRunGoals.pdf. Information about the review of monetary policy strategy, tools, and communications can also be found on the Board’s website, at https://www.federalreserve.gov/monetarypolicy/review-of-monetary-policystrategy-tools-and-communications.htm.
In addition, see Lael Brainard (2020), “Bringing the Statement on Longer-Run Goals and Monetary Policy Strategy into Alignment with Longer-Run Changes in the Economy,” speech delivered at “How the Fed Will Respond to the COVID-19 Recession in an Era of Low 12  -9below 2 percent, and the low responsiveness of inflation to resource slack embodied in a flat Phillips curve reduces the amount we can cut rates to buffer the economy, weakens inflation expectations, and could lead to worse employment and inflation outcomes over time.