In this June 30, 2020, file photo Federal Reserve Board Chairman Jerome Powell, reflected in the sneeze guard set up between himself and members of the House Committee on Financial Services, speaks during a hearing on oversight of the Treasury Department and Federal Reserve pandemic response on Capitol Hill in Washington. The Federal Reserve adjusted its inflation target to seek price increases above 2% annually, a move that will likely keep interest rates low for years to come. The Fed on Wednesday, Sept. 16, also left its benchmark short-term rate unchanged at nearly zero, where it has been since the pandemic intensified in March. (Bill O'Leary/The Washington Post via AP, Pool)
By Christopher Rugaber
The Federal Reserve adjusted its inflation target to seek price increases above 2 percent annually, a move that will likely keep interest rates low for years to come.
The Fed on Wednesday also left its benchmark short-term rate unchanged at nearly zero, where it has been since the pandemic intensified in March. Fed officials also indicated in a set of economic projections that they expect the rate to stay there at least through 2023.
The Fed's benchmark interest rate influences borrowing costs for homebuyers, credit card users, and businesses.
The Fed's statement says that because inflation has mostly fallen below its target of 2 percent in recent years, Fed policymakers now "will aim to achieve inflation moderately above 2 percent for some time." It also says it will keep rates low until inflation averages 2 percent over an unspecified period.
The change is significant for the central bank because it means that Fed officials will accept higher inflation to make up for its previous shortfalls below 2 percent. Previously, the Fed has ignored such shortfalls.
Fed chair Jerome Powell first said last month that the Fed would seek inflation above 2 percent over time, rather than just keeping it as a static goal.
The change reflects a growing concern at the Fed that in recessions, inflation often falls far below 2 percent, but it doesn't necessarily reach 2 percent when the economy is expanding. Over time, that means inflation on average falls further from the target. As businesses and consumers come to expect increasingly lower inflation, they act in ways that entrench slower price gains.
The Fed prefers a little inflation because that gives the central bank more room to cut or raise short-term interest rates.
The Rev. Al Sharpton is set to lead a protest march on Wall Street to urge corporate America to resist the Trump administration’s campaign to roll back diversity, equity and inclusion initiatives. The New York civil rights leader will join clergy, labor and community leaders Thursday in a demonstration through Manhattan’s Financial District that’s timed with the anniversary of the Civil Rights-era March on Washington in 1963. Sharpton called DEI the “civil rights fight of our generation." He and other Black leaders have called for boycotting American retailers that scaled backed policies and programs aimed at bolstering diversity and reducing discrimination in their ranks.
President Donald Trump's administration last month awarded a $1.2 billion contract to build and operate what's expected to become the nation’s largest immigration detention complex to a tiny Virginia firm with no experience running correction facilities.
Chipmaker Nvidia is poised to release a quarterly report that could provide a better sense of whether the stock market has been riding an overhyped artificial intelligence bubble or is being propelled by a technological boom that’s still gathering momentum.
Cracker Barrel said late Tuesday it’s returning to its old logo after critics — including President Donald Trump — protested the company’s plan to modernize.
Low-value imports are losing their duty-free status in the U.S. this week as part of President Donald Trump's agenda for making the nation less dependent on foreign goods. A widely used customs exemption for international shipments worth $800 or less is set to end starting on Friday. Trump already ended the “de minimis” rule for inexpensive items sent from China and Hong Kong, but having to pay import taxes on small parcels from everywhere else likely will be a big change for some small businesses and online shoppers. Purchases that previously entered the U.S. without needing to clear customs will be subject to the origin country’s tariff rate, which can range from 10% to 50%.
Southwest Airlines will soon require plus-size travelers to pay for an extra seat in advance if they can't fit within the armrests of one seat. This change is part of several updates the airline is making. The new rule starts on Jan. 27, the same day Southwest begins assigning seats. Currently, plus-size passengers can pay for an extra seat in advance and later get a refund, or request a free extra seat at the airport. Under the new policy, refunds are still possible but not guaranteed. Southwest said in a statement it is updating policies to prepare for assigned seating next year.
Cracker Barrel is sticking with its new logo. For now. But the chain is also apologizing to fans who were angered when the change was announced last week.
Elon Musk on Monday targeted Apple and OpenAI in an antitrust lawsuit alleging that the iPhone maker and the ChatGPT maker are teaming up to thwart competition in artificial intelligence.
