Federal Reserve chairman Jerome Powell unveiled a new approach to setting US monetary policy, letting inflation and employment run higher in a shift that will likely keep interest rates low for years to come.
Following a more than year-long review, Mr Powell said the Fed will seek inflation that averages 2 per cent over time, a step that implies allowing for price pressures to overshoot after periods of weakness. It also adjusted its view of full employment to allow labour-market gains to reach more workers.
“Our revised statement emphasises that maximum employment is a broad-based and inclusive goal,” Mr Powell said Thursday in a speech delivered virtually for the central bank’s annual policy symposium, traditionally held in Jackson Hole, Wyoming.
“This change reflects our appreciation for the benefits of a strong labour market, particularly for many in low and moderate-income communities.”
During the longest US economic expansion on record until the pandemic hit earlier this year, many groups benefited – including minorities and women – in their ability to find work. With unrest breaking out across the US over racial inequality, questions about how the Fed’s policy helps communities broadly have been raised.
“They really, really, really are not going to be raising interest rates any time soon,” said James Knightley, chief international economist at ING Financial Markets. “The Fed is saying rates will be lower for longer, but don’t worry inflation is not going to be picking up.”
In its new statement on longer-run goals, the Fed said its decisions would be informed by its assessment of “shortfalls of employment from its maximum level.” The previous version had referred to “deviations from its maximum level.” The change de-emphasises previous concerns that low unemployment can cause excess inflation.
While expected, the announcement of the strategy shift came sooner than some thought. After first fluctuating on the news, US stocks resumed their record-breaking rally and the Treasury yield curve steepened to the widest in two months as traders bet policy rates will remain locked near zero for even longer.
Regarding price pressures, the document says the committee will target “inflation that averages 2 per cent over time” and will aim to bring inflation above the 2 per cent target following periods when inflation runs below that level.
Calling the revised strategy a “a robust updating,” Mr Powell spelled out that after periods when inflation has been running below 2 per cent, monetary policy will likely aim to achieve inflation moderately above 2 per cent for some time.
The shift he announced represents the product of an unprecedented review of the Fed’s strategies, tools and approach to communications that began in early 2019.
Since the central bank officially set its inflation target at 2 per cent in 2012, the Fed’s preferred measure of price increases has consistently fallen short of that objective, averaging just 1.4 per cent.
Low inflation contributes to low interest rates, reducing the Fed’s ability to fight off economic downturns and potentially making them deeper and longer. Mr Powell noted a risk, saying that “if excessive inflationary pressures were to build or inflation expectations were to ratchet above levels consistent with our goal”, the central bank wouldn’t hesitate to act.
Fed officials also altered the strategy document to include a section acknowledging that financial stability can also affect their ability to reach their longer-run goals.
“Sustainably achieving maximum employment and price stability depends on a stable financial system,” it said. “Therefore, the committee’s policy decisions reflect its longer-run goals, its medium-term outlook and its assessments of the balance of risks, including risks to the financial system that could impede the attainment of the committee’s goals.”
LIST OF INVITEES
Shergo Kurdi (am)
Rayhan Thomas
Saud Al Sharee (am)
Min Woo Lee
Todd Clements
Matthew Jordan
AbdulRahman Al Mansour (am)
Matteo Manassero
Alfie Plant
Othman Al Mulla
Shaun Norris
If you go:
Getting there:
Flying to Guyana requires first reaching New York with either Emirates or Etihad, then connecting with JetBlue or Caribbean Air at JFK airport. Prices start from around Dh7,000.
Getting around:
Wildlife Worldwide offers a range of Guyana itineraries, such as its small group tour, the 15-day ‘Ultimate Guyana Nature Experience’ which features Georgetown, the Iwokrama Rainforest (one of the world’s four remaining pristine tropical rainforests left in the world), the Amerindian village of Surama and the Rupununi Savannah, known for its giant anteaters and river otters; wildlifeworldwide.com
T20 WORLD CUP QUALIFIERS
Qualifier A, Muscat
(All matches to be streamed live on icc.tv)
Fixtures
Friday, February 18: 10am Oman v Nepal, Canada v Philippines; 2pm Ireland v UAE, Germany v Bahrain
Saturday, February 19: 10am Oman v Canada, Nepal v Philippines; 2pm UAE v Germany, Ireland v Bahrain
Monday, February 21: 10am Ireland v Germany, UAE v Bahrain; 2pm Nepal v Canada, Oman v Philippines
Tuesday, February 22: 2pm Semi-finals
Thursday, February 24: 2pm Final
UAE squad:Ahmed Raza(captain), Muhammad Waseem, Chirag Suri, Vriitya Aravind, Rohan Mustafa, Kashif Daud, Zahoor Khan, Alishan Sharafu, Raja Akifullah, Karthik Meiyappan, Junaid Siddique, Basil Hameed, Zafar Farid, Mohammed Boota, Mohammed Usman, Rahul Bhatia
Match info
Uefa Champions League Group H
Juventus v Valencia, Tuesday, midnight (UAE)
How to avoid crypto fraud
- Use unique usernames and passwords while enabling multi-factor authentication.
- Use an offline private key, a physical device that requires manual activation, whenever you access your wallet.
- Avoid suspicious social media ads promoting fraudulent schemes.
- Only invest in crypto projects that you fully understand.
- Critically assess whether a project’s promises or returns seem too good to be true.
- Only use reputable platforms that have a track record of strong regulatory compliance.
- Store funds in hardware wallets as opposed to online exchanges.
MATCH INFO
England 19 (Try: Tuilagi; Cons: Farrell; Pens: Ford (4)
New Zealand 7 (Try: Savea; Con: Mo'unga)
Timeline
2012-2015
The company offers payments/bribes to win key contracts in the Middle East
May 2017
The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts
September 2021
Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act
October 2021
Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence
December 2024
Petrofac enters into comprehensive restructuring to strengthen the financial position of the group
May 2025
The High Court of England and Wales approves the company’s restructuring plan
July 2025
The Court of Appeal issues a judgment challenging parts of the restructuring plan
August 2025
Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision
October 2025
Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange
November 2025
180 Petrofac employees laid off in the UAE
UAE currency: the story behind the money in your pockets
More on Quran memorisation:
What is Diwali?
The Hindu festival is at once a celebration of the autumn harvest and the triumph of good over evil, as outlined in the Ramayana.
According to the Sanskrit epic, penned by the sage Valmiki, Diwali marks the time that the exiled king Rama – a mortal with superhuman powers – returned home to the city of Ayodhya with his wife Sita and brother Lakshman, after vanquishing the 10-headed demon Ravana and conquering his kingdom of Lanka. The people of Ayodhya are believed to have lit thousands of earthen lamps to illuminate the city and to guide the royal family home.
In its current iteration, Diwali is celebrated with a puja to welcome the goodness of prosperity Lakshmi (an incarnation of Sita) into the home, which is decorated with diyas (oil lamps) or fairy lights and rangoli designs with coloured powder. Fireworks light up the sky in some parts of the word, and sweetmeats are made (or bought) by most households. It is customary to get new clothes stitched, and visit friends and family to exchange gifts and greetings.
