Fed Chair Jerome Powell: Is the US Economy Entering a \'New Normal\'?
Federal Reserve Chair Jerome Powell is suggesting the US economy may be transitioning to a “new normal” following the significant disruptions caused by the COVID-19 pandemic. This announcement, echoing sentiments from as early as September 23, 2025, comes as the Fed navigates a complex economic landscape.
On September 30, 2025, from Washington, AP reported that Federal Reserve Chair Jerome Powell signaled that more interest rate cuts were potentially in the pipeline, although emphasizing they would be strategically implemented. This follows earlier statements where Powell consistently highlighted the Fed\'s dedication to maintaining the US economy\'s strong position, as confirmed on September 30, 2025.
Powell\'s Perspective on the US Economy
Powell’s assessment includes both optimistic views and caution regarding potential challenges. While downplaying the immediate threat of a recession, he acknowledged the possibility of future supply shocks impacting the U.S. economy. This is a crucial consideration when breaking down potential implications of economic events such as the China tariff truce.
The Fed\'s Dual Mandate and Data Dependency
U.S. Federal Reserve Chair Jerome Powell emphasized the Fed\'s data-dependent approach, stating that the central bank will wait for further evidence regarding the economy\'s trajectory before adjusting interest rates. This aligns with the Fed’s commitment to its dual mandate, focusing on both maximum employment and price stability, goals given to us by Congress.
The idea of a "new normal," articulated by Federal Reserve Chair Jerome Powell on September 23, 2025, suggests a shift in economic dynamics and requires careful monitoring of incoming data. Powell kept his remarks closely aligned with this data-driven approach, ensuring any changes to interest rates or policy reflect the most up-to-date economic realities.