Federal Reserve Adjusts Policy Framework Amid Economic Shifts – Coincu

Federal Reserve Chairman Jerome Powell announced on May 15, 2025, in Washington, D.C., a comprehensive review of the Fed’s policy framework. This revision addresses economic changes since 2020.

The adjustments in monetary policy aim to accommodate the transformed economic landscape. Market reactions indicate interest in how these changes will affect inflation-sensitive assets.

Powell Implements Policy Review Amid 2020 Economic Changes

Jerome Powell disclosed that the Federal Reserve is reevaluating its policy-making framework due to significant post-2020 economic shifts. A five-year-old framework is under review, focused on adapting to emerging economic conditions. This review encompasses the Federal Open Market Committee’s approach, likely impacting how monetary policy is communicated. Market leaders express interest in the potential influence of higher real interest rates and their long-term implications.

“A framework should be robust to a broad range of conditions, but also needs to be updated periodically as the economy and our understanding of it evolve.” — Jerome Powell

“A framework should be robust to a broad range of conditions, but also needs to be updated periodically as the economy and our understanding of it evolve.” — Jerome Powell

Bitcoin Market Adjusts to Fed’s Policy Shift Announcement

Did you know? Jerome Powell previously guided the Fed’s framework review in 2019, resulting in pivotal policy changes by mid-2020.

Bitcoin (BTC), with a market cap of $2.06 trillion, saw a 24-hour price decrease of 0.11% as of May 15, 2025, according to CoinMarketCap. Current price stands at $103,472.97 with a 24-hour trading volume of $47.47 billion.

Coincu’s research team highlights this review may introduce financial and regulatory shifts, echoing prior Fed responses to economic disruptions. Predicted responses involve adjusting to volatile supply shocks and maintaining clear communication in such scenarios.