The Federal Reserve issues a semiannual monetary policy report, once again committing to achieving price stability.

Despite inflation far exceeding the 2% target, Federal Reserve policymakers reiterated their commitment to achieving price stability in the semi-annual monetary policy report released on Friday in Washington. This is the first monetary policy report issued by new Federal Reserve Chairman Kevin Wash since taking office, and the overall tone is relatively optimistic about the US economy. The report states that economic growth is robust, labor productivity is strong, and the banking system has shown almost no risk. The report notes that inflation has increased in the past year due to factors such as the war with Iran, tariffs, and rising costs of technology products. However, the report also emphasizes that other inflation indicators, including the so-called trimmed mean PCE price index, have fallen in the past year. This statement is consistent with Wash's previous view that policymakers need to broaden the range of inflation indicators to more accurately understand the price pressures. Wash has already established five working groups led by external experts, one of which specializes in researching inflation frameworks and is expected to submit a report to policymakers by the end of the year. The monetary policy report states, "Price stability is the foundation for the healthy and stable operation of the economy, and also helps improve the well-being of all Americans. The committee is ready to take decisive action to ensure that long-term inflation expectations continue to remain stable." When discussing the impact of the artificial intelligence boom on the economy, the report points out that the adoption of new technology by companies may drive up labor productivity. However, the report also emphasizes that the prices of computers, electronic products, and software have risen sharply this year, reflecting the increased demand for semiconductors and other related materials driven by the construction of artificial intelligence. In terms of the balance sheet, the Federal Reserve stated that operating losses have persisted since the end of 2022. Since early January of this year, deferred assets have decreased by $7 billion, to approximately $236 billion. The report also states that there are no longer cumulative losses from the regional reserve banks, which have collectively remitted about $6 billion to the US Treasury. Earlier this year, the New York Fed stated that the overall Federal Reserve system is expected to return to profitability by 2026. The report also analyzed the forecasting records of Federal Reserve policymakers, noting that these forecasts are still subject to significant uncertainty. This conclusion is consistent with Wash's advocacy for reducing the use of forward guidance.