Powell: The Federal Reserve is adjusting its overall policy framework.

Federal Reserve Chairman Powell said that the Federal Reserve is adjusting its overall policy framework to address significant changes in inflation and interest rate prospects after the 2020 pandemic. Powell said, "Since 2020, there have been significant changes in the economic environment, and our assessment will reflect our assessment of these changes." The Federal Reserve adopted its current framework five years ago and began evaluating the framework this year. The evaluation is unlikely to impact the way the Federal Reserve currently sets interest rates. Powell had previously stated that the Federal Reserve may complete this process and announce the results by August or September. Powell stated that after the 2020 pandemic, the "real" interest rates may rise following inflation adjustments, which could affect elements of the current framework of the Federal Reserve. He said, "Higher real interest rates may reflect the possibility of inflation being more unstable in the future than during the crisis period of the 2010s. We may be entering a period of more frequent and potentially longer-lasting supply shocks - which is a difficult challenge for both the economy and the central bank."