Federal Reserve Chair Jerome Powell is preparing to pivot from an economic approach that has faced growing criticism due to its diminishing effectiveness. Initially designed to stabilize inflation while supporting employment, the strategy has encountered obstacles as persistent price pressures and shifting labor market dynamics have undermined its intended outcomes. In response, policymakers are reconsidering their tools and timelines, signaling a potential recalibration of interest rate policies. This strategic reevaluation reflects broader concerns about sustaining long-term economic growth without triggering unintended consequences in financial markets. While inflation remains above target, recent data suggest it may be cooling at a slower pace than anticipated, prompting officials to weigh more flexible tactics. The shift underscores the central bank’s effort to adapt to an evolving economic landscape marked by uncertainty.
— news from The Wall Street Journal
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Powell Plans U-Turn on an Economic Strategy That Soured The Wall Street Journal