Powell: The Era of Low Rates is Over — The Fed is Preparing for Inflationary Shocks
Fed Chair Jerome Powell stated that inflation in the U.S. will be more volatile in the coming years, and the economy will be subject to new supply shocks. Long-term rates are already significantly higher than in the 'quiet' 2010s — and this, he said, reflects a paradigm shift.
📌 Key Signals:
– 📊 The current Fed strategy is outdated — it was developed in 2019 when inflation was too low.
– 🛠 The new policy will be flexible — capable of adapting to a “wide range of conditions and events.”
– 🔁 The Fed acknowledges the end of the era of cheap money and is preparing tools for the “new normal” — high rates and instability.
