3,882
edits
Federal Reserve:Meetings/2023 September 20: Difference between revisions
Federal Reserve:Meetings/2023 September 20 (view source)
Revision as of 20:13, 21 September 2023
, 21 September 2023no edit summary
No edit summary |
No edit summary |
||
| Line 111: | Line 111: | ||
* '''If the economy comes in stronger than expected, that just means we'll have to do more in terms of monetary policy to get back to 2 percent.''' | * '''If the economy comes in stronger than expected, that just means we'll have to do more in terms of monetary policy to get back to 2 percent.''' | ||
* '''It may be that the neutral rate has risen'''. There are people raising their estimates of the neutral rate, and '''it's certainly plausible that the neutral rate is higher than the longer-run rate''' (SEP is the longer-run rate). It is possible that the neutral rate at this moment is higher than that and that's part of the explanation for why the economy has been more resilient than expected. | * '''It may be that the neutral rate has risen'''. There are people raising their estimates of the neutral rate, and '''it's certainly plausible that the neutral rate is higher than the longer-run rate''' (SEP is the longer-run rate). It is possible that the neutral rate at this moment is higher than that and that's part of the explanation for why the economy has been more resilient than expected. | ||
* Currently | * Currently they are focus in finding the appropiate level of real rates, then they will focus on how long it needs ot stay at that level. | ||
* The time will come at some point, without saying when, that it's appropriate to cut. Part of that may be that real rates are rising because inflation is coming down. Part of it just may be that it'll be all the factors that we see in the economy. | * The time will come at some point, without saying when, that it's appropriate to cut. Part of that may be that real rates are rising because inflation is coming down. Part of it just may be that it'll be all the factors that we see in the economy. | ||
* The risk of over-tightening and the risk of under-tightening have become more equal. The natural, common-sense thing to do is to move a little more slowly as you get closer to it | * The risk of over-tightening and the risk of under-tightening have become more equal. The natural, common-sense thing to do is to move a little more slowly as you get closer to it | ||