bee Calculated Risk On 2/12/2025 12:34:00 PM
Today, in the Calculated Risk Real Estate Newsletter: Lawler: More Ruminations on the “Neutral” Rate of Interest
A letter excerpt:
When talking about the so-called “neutral” interest rate, many financial commentators, financial analysts, and even monetary policymakers talk about the nominal interest rate. However, the theoretical “neutral” interest rate is a real, or inflation-adjusted interest rate.
…
In SUM, (1) The Market’s View of the Neutral Fed Funds Rate is higher than the majority of FOMC participants; and (2) using implied market expectations the current stance of monetary policy is not meaningfully restrictive.
There is much more in the article.