Economics
Here's Why Fed Doves and Hawks Could Both Be Right
The natural rate interest for the U.S. economy is lower than what the Fed projects but it can still justify rate hikes in the coming years, according to analysts at Deutsche Bank AG.
The Two Big Questions Facing the Fed
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When Federal Reserve Board officials meet at the Jackson Hole summit on Friday, they will grapple with a question that will influence both their near-term policy stance and their longer-term monetary framework: what's the outlook for the underlying natural interest rate of the economy?
The natural interest rate, sometimes known as its neutral rate, is the inflation-adjusted level that's consistent with the U.S. economy expanding at its full potential without overheating — in other words, it assumes that the Fed is fulfilling both the full employment and stable inflation components of its mandate.