The Fed is very close to introducing changes to its policy framework that would explicitly allow for an overshoot of the inflation target to compensate for the undershoot over the past decade. Those changes to the long-run goals and strategy statement, which are likely to be discussed by Chair Jerome Powell in his Jackson Hole speech on Thursday and incorporated at the next FOMC meeting in mid-September, will probably pave the way for the introduction of additional monetary stimulus, albeit possibly not until later this year.
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