We expect that the Federal Reserve will lift its estimate of the terminal rate to 3% this week. … READ MORE >
r-star
Fed cuts rate by a quarter point ahead of a possible pause
Slowing inflation and strong productivity gains imply that the Fed has ample room to keep cutting rates next year. … READ MORE >
R-star: The role of the natural rate of interest in monetary policy and economic growth
Known by economists as r-star, it has risen to a range between 1.75% and 2% in our estimation, a marked increase from the 0.5% that had prevailed over the previous 15 years. … READ MORE >
Monetary and fiscal policy in a changing economy: Why the natural rate of interest is key to Fed policy
The natural rate of interest, also known as r-start, forms the basis for setting the Fed’s overnight policy rate and, by extension, interest rates across all maturities. … READ MORE >