By Martin Crutsinger
The Federal Reserve announced a significant change Thursday in how it manages interest rates by saying it plans to keep rates near zero even after inflation has exceeded the Fed’s 2% target level.
The change signifies that the Fed is prepared to tolerate a higher level of inflation than it generally has in the past. And it means that borrowing rates for households and businesses — for everything from auto loans and home mortgages to corporate expansion — will likely remain ultra-low for years to come.
The new goal says that “following periods when inflation has been running persistently below 2%, appropriate monetary policy will likely aim to achieve inflation moderately above 2% for some time.”
The new Fed policy sought to underscore its belief that a low jobless rate was good for the economy by saying it would seek to assess the “shortfalls” in employment from the maximum level.
In a speech detailing the changes, Chairman Jerome Powell made clear that the policy change reflects the reality that high inflation — once the biggest threat to the economy — no longer appears to pose a serious danger, even when unemployment is low and the economy is growing strongly. Rather, Powell said, the economy has evolved in a way that allows the Fed to keep rates much lower than it otherwise would without igniting price pressures.
“The economy is always evolving,” Powell said. “Our revised statement reflects our appreciation for the benefits of a strong labor market, particularly for many in low- and moderate-income communities and that a robust job market can be sustained without causing an unwelcome increase in inflation."
In his speech, Powell said that the Fed's decision to allow unemployment to fall to a 50-year low before the pandemic had played an important role in lifting the fortunes of low-income workers.
Stocks opened higher for the first time this week as Wall Street digested positive economic data that showed inflation was cooling.
Fans of the Grand Theft Auto series got a glimpse of the latest release that's not due out until 2025. The trailer was officially released after a leak on the 'X' platform, giving an idea to industry experts of the massive effect GTA will have on the gaming sector. Cheddar News senior reporter Michelle Castillo breaks it all down.
Tax season is around the corner as soon as we conclude the holiday festivities. Mark Steber, chief tax information officer with Jackson Hewitt, joined Cheddar News to discuss some tax changes that people should be aware of and what to expect during next year's tax filing season.
There's a winning lottery ticket in Florida worth $44 million that's gone unclaimed and is set to expire next week.
Getting crafty for the holidays to entertain guests can be pretty expensive. Cheddar News explains how you can do all of that on a budget.
New regulations from the U.S. government may cause the price of electric vehicles to go up.
New data shows job openings fell in October even though hiring remains healthy.
The holiday season is here and it could be a stressful time as people plan shopping, cooking and traveling. Sally Holmes, editor-in-chief of InStyle Magazine, joined Cheddar News to discuss a new social media trend #Treatculture that helps people take a moment to treat themselves and how that is a psychological benefit to relieve stress.
English Wikipedia raked in more than 84 billion views this year, according to numbers released Tuesday by the Wikimedia Foundation, the non-profit behind the free, publicly edited online encyclopedia. And the most popular article was about ChatGPT (yes, the AI chatbot that’s seemingly everywhere today).
Wikipedia has released its list of most viewed articles for 2023 with the site seeing over 84 billion visits. The most searched topic was ChatGPT with nearly 50 billion page views
