Fed Chairman Powell "admits his mistake": the era of long-term low interest rates is over

Odaily News Federal Reserve Chairman Jerome Powell said on Thursday that the Fed is adjusting its overall policy-making framework to respond to significant changes in the outlook for inflation and interest rates following the 2020 coronavirus pandemic. “The economic environment has changed significantly since 2020, and our review will reflect our assessment of these changes,” Powell said.
Nick Timiraos, a "Fed mouthpiece" and Wall Street Journal reporter, pointed out that the Fed adopted the current framework five years ago and began reviewing it this year, and this review is unlikely to affect the way the Fed currently sets interest rates. Powell hinted that higher inflation-adjusted interest rates (i.e., "real interest rates") that emerged after the 2020 COVID-19 pandemic may make some elements of the Fed's current framework no longer applicable. (Jinshi)