The Neutral Interest Rate: A New Economic Reality

Neutral Interest Rate: A Contentious Economic Concept - Todays podcast explores the complex economic idea of the neutral interest rate, or R-star, which central banks use to guide their policies. Despite its importance, theres no consensus on its ideal value, leading to ongoing debates among economists and policymakers. Factors like an aging population and low borrowing costs have kept this rate low, but recent events like the pandemic and inflation surge suggest it might be rising again. New research even hints at a potential three percent neutral rate, leaving the Federal Reserve in a challenging position as they navigate the economys future.The Daily News Now! — Every city. Every story. AI-powered. Hosted on Acast. See acast.com/privacy for more information.