Fed Chair Powell warns interest rates won't return to near-zero levels soon

Federal Reserve Chair Jerome Powell has cautioned that US interest rates are unlikely to drop back to near-zero levels in the foreseeable future. Powell attributes this stance to significant economic changes in recent years, prompting the Fed to reconsider its policy framework.

Powell also warned of potential economic turbulence ahead, stating, 'We may face a period of more frequent and possibly persistent supply shocks—a challenging scenario for both the economy and central banks.' His remarks set expectations for the Fed's monetary policy direction.

The Fed aggressively raised rates in recent years before beginning cuts in mid-2023. Current rates remain at 4.25-4.5%, which Powell suggests could indicate future inflation volatility exceeding pre-pandemic patterns.