Skip to content
Subscriber Only
Markets
Economics

Fed Seen Holding Rates at Zero for Five Years in New Policy

  • Fed expected to tolerate faster inflation, lower unemployment
  • Powell to speak Thursday on long-awaited Fed framework review
The Marriner S. Eccles Federal Reserve building stands in Washington, D.C.
The Marriner S. Eccles Federal Reserve building stands in Washington, D.C.Photographer: Andrew Harrer/Bloomberg
Updated on

The Federal Reserve looks likely to keep short-term interest rates near zero for five years or possibly more after it adopts a new strategy for carrying out monetary policy.

The new approach, which could be unveiled as soon as next month, is likely to result in policy makers taking a more relaxed view toward inflation, even to the point of welcoming a modest, temporary rise above their 2% target to make up for past shortfalls.