Approach to adjusting interest rates

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Interest rates are at a near all-time low with the prime rate around 4.5% and the Federal Funds rate at 1.5%. This has helped to stabilize and improve the economy over the past several years, and unemployment is now at its lowest since 2001, 4.1%. Inflation has been increasing gradually and is now at 2.2% annually (seasonally unadjusted). The Fed has been gradually increasing interest rates in order to forestall potential inflation. Recently Jerome Powell replaced Janet Yellen as the Chairman of the Federal Reserve. It is still very early in his term, but does his approach to adjusting interest rates differ from the previous Chair, Janet Yellen? If you were an outside adviser to Fed Chair Jerome Powell what advice would you give to him and why?

Reference no: EM131918415

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