At the beginning of 2023, the U.S. economy has shown significant resilience, but it also faces multiple challenges. The labor market is close to full employment, yet the pace of job growth has noticeably slowed, with an average monthly increase of only 35,000 jobs. Nevertheless, the unemployment rate remains stable at 4.2%.

On the inflation front, influenced by factors such as tariffs, the core Personal Consumption Expenditures ( PCE ) inflation rate has risen to 2.9%. It is noteworthy that long-term inflation expectations remain stable, providing policymakers with some room for maneuver.

Currently, U.S. economic policy faces the dual risks of rising inflation and slowing job growth, requiring a balance between these two goals. To address this complex situation, the Federal Reserve has revised its monetary policy framework. The new framework removes the focus on the effective lower bound (ELB) and compensatory strategies, shifting to emphasize achieving policy goals within a broader economic context. At the same time, the Federal Reserve reaffirms its commitment to maintaining a 2% inflation target and retains the policy evaluation cycle every five years.

It is worth noting that the simultaneous slowdown of supply and demand in the labor market has intensified the downside risks to employment. Although tariffs have pushed up short-term inflation, long-term inflation expectations remain relatively stable. In this context, the formulation of monetary policy needs to be more cautious to balance the risks of rising inflation and declining employment, and to adjust the current restrictive policy stance in a timely manner.

The core of the Federal Reserve's recent framework revision lies in the cancellation of the previous compensatory strategy, shifting to a stronger emphasis on seeking a balance between dual objectives while enhancing the broad applicability of policies. This adjustment reflects the Federal Reserve's deep insight into the current economic situation and its forward-looking considerations for future policy-making.

Overall, the resilience demonstrated by the U.S. economy in 2023 is encouraging, but it also faces numerous challenges. Policymakers need to act cautiously in this complex economic environment to sustain economic growth while ensuring price stability and a healthy development of the job market.