Federal Reserve To Keep Rates Near Zero Even If Inflation Rises

The Federal Reserve plans to maintain low interest rates even if inflation exceeds the 2% target, indicating a shift towards a more flexible approach. Chairman Jerome Powell emphasized that the Fed can adjust if inflation spikes but is not obligated to do so. Recent trends show low inflation, reducing its threat to the economy, allowing the Fed to keep rates low. This could result in prolonged low borrowing rates for mortgages and business loans.

In what way has the inflation rate changed to allow the Fed to keep rates low?

What potential impact could the Fed's approach have on borrowing rates?