It's official: as Powell unveiled moments ago, the Fed is now operating under an explicit Average Inflation Targeting platform, with the Fed seeking inflation that averages 2% over time, a step that implies allowing for periods of overshoots, and assures no rate hikes for years to come (according to BofA simulations, a 2% AIT would mean no rate hikes for up to 42 years). At the same time, the Fed's shift on maximum employment will allow labor-market gains to run more broadly.

Regarding price pressures, the document says the committee will target "inflation that averages 2% over time" and will aim to bring inflation above the 2% target following periods when inflation runs below that level.

"The maximum level of employment is a broad-based and inclusive goal," Powell said in a speech delivered virtually for the central bank's annual policy symposium traditionally held in Jackson Hole, Wyoming. "This change reflects our appreciation for the benefits of a strong labor market, particularly for many in low- and moderate-income communities."

In its statement, the Fed also said its decisions would be informed by its assessment of "shortfalls of employment from its maximum level." The previous version as Bloomberg notes had referred to "deviations from its maximum level." The change de-emphasizes previous concerns that low unemployment can cause excess inflation.

To be sure, pragmatic Fed watchers will immediately admit that there is nothing new here: after all the Fed's implicit core PCE inflation target has already been 2% yet even with a record $7 trillion balance sheet, the Fed failed to hit it for years.