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The Fed Has To Adjust To The 'New Normal'

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The Federal Reserve

Growth and productivity are slowing down, and inflation is taking way longer than expected—but that’s just the "new normal."

At least it is according to Fed Chair Janet Yellen, who delayed raising rates at the last Fed meeting, making investors wonder if, at this rate, they'll live long enough to see the next. Part of the new normal is the strange fact the economy has been slow to respond to rock-bottom borrowing costs, forcing economists to wonder if there’s an imbalance in the long-run equilibrium, Bloomberg reports.

Meanwhile, Chicago Fed chief Charles Evans says it’s worth considering abandoning plans to raise rates until inflation hits the Fed’s 2% target. [Bloomberg]