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Fed could be locked into zero rates for five years, or even longer

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Joggers pass the Marriner S. Eccles Federal Reserve building in Washington, D.C., on Tuesday, Aug. 18, 2020.

Erin Scott | Bloomberg | Getty Images

Interest rates near zero likely will stay in place not for months but years as the Federal Reserve seeks to reengineer an economy characterized by low inflation and an uneven labor market.

Wall Street is prepping for a return to the post-Great Recession days, when rock-bottom short-term rates prevailed for seven years before the Fed even tried moving them higher.

Fed officials have outlined a revised policy in which it now will target “average inflation,” meaning a higher tolerance for inflation above 2% before hiking interest rates from current…



Source cnbc.com

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