24. Federal Reserve · Notable
End "flexible average inflation targeting"
Printed page 740 24. Federal Reserve
“There should be no more “flexible average inflation targeting,” which amounts to ex post justification for bad policy.”
What has happened
- Done
Flexible average inflation targeting is gone from the Federal Reserve's own framework. On August 22, 2025 the Federal Open Market Committee announced unanimous approval of updates to its Statement on Longer-Run Goals and Monetary Policy Strategy, the consensus statement that "articulates the Committee's approach to monetary policy and serves as the foundation for its policy actions", saying the updates "reflect lessons from the economy over the past five years". The revised statement — reaffirmed effective January 27, 2026 and current — contains no occurrence of the word "average" and none of "shortfall": the 2020 language committing the Committee to inflation "that averages 2 percent over time" and to responding to "shortfalls of employment from its maximum level" was struck. What remains is a symmetric two percent goal with no makeup element.
Research log
What was searched, and what didn’t count as evidence
Research notes
The claim was verified against the operative document rather than against commentary: pdftotext -layout over the current Statement returns zero occurrences of “average” and zero of “shortfall”, and the only revisions between the 2020 statement and the current text are the August 2025 update and the January 2026 annual reaffirmation.
This is the only done in Chapter 24. It is done and not partial because the named object — the flexible average inflation targeting framework — no longer exists in the document that constituted it. The related ask that Congress compel a published target range and growth path (#2024) is untouched.
- Action
- eliminate
- Object
- Flexible average inflation targeting framework
- ID
- 2025