Federal Reserve Chair Jerome Powell announced changes to the central bank’s operating framework, reflecting higher inflation pressures and reduced near zero interest rates. The new approach emphasizes the Fed’s commitment to maintaining well-anchored longer-term inflation expectations. The review was widely expected and follows a period of low inflation and high pandemic-induced inflation.

The pandemic led to high inflation pressures in 2021, prompting aggressive Fed rate hikes. The central bank has been able to lower its interest rate target, but may face challenges in returning to pre-pandemic low rates due to changes in the economy and increased government borrowing. Investors expect possible rate cuts in September, pending inflation threats.

Read more at Yahoo Finance: Fed’s Powell announces policy framework tweaks for changed economic landscape