Fed Seeks to Preserve Labor Market Lessons in Rewriting Rates Strategy

The long period of low inflation before Covid taught the Federal Reserve not to fear low unemployment. But the shock of the pandemic reminded policymakers how painful high inflation could be.

As they rewrite the strategy document that guides their interest-rate decisions, Fed officials are trying to figure out how to embrace both lessons. They want to preserve an approach that maximizes the benefits of economic expansions for working Americans, while making it clear they won’t let inflation slip out of control again.