China must properly channel capital inflow

The Federal Reserve on Thursday published the Statement on Longer-Run Goals and Monetary Policy Strategy on its website, saying monetary policy plays an important role in stabilizing the economy.

There are two striking but unsurprising changes in the new policy. First, the Fed said it would seek to achieve an average inflation rate slightly above 2 percent for a period of time, which is interpreted as a signal to expect loose monetary policy. Second, the Fed said maximum employment was a broad-based and inclusive goal, and its policy decisions would be based on its assessment of maximum underemployment, which could mean the Fed will allow the job market to overheat.

The two major changes in the Fed's inflation and employment policies are based on its assessment that downward risks to employment and inflation have increased in the United States. They also indicate that the Fed will use all tools to achieve price stability and maximum employment.