Former top Fed policy staffer suggests neutral rate could be 5%

The Wall Street Journal report on a paper from a “former top Fed staffer”.

  • Federal Reserve officials have time before they need to agree on what constitutes a neutral level for monetary policy
  • but neutral may well be a lot higher than central bankers currently expect
  • officials appear to see something around 2.5% as neutral, inflation expectations data suggests neutral could be much higher, like 5% if the data is accurate.

Link to the article here, it is gated though.

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