Fed Seeking to Find Where ‘Phantom Menace’ Neutral Rate Sits
Neutral interest rate neither speeds nor slows growth
Getting it wrong increases the peril of triggering a recession
WATCH: The latest jobs report is bolstering bets that the Federal Reserve will use aggressive interest-rate hikes to tackle the surge in inflation.Source: Bloomberg
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Federal Reserve Chair Jerome Powell and his colleagues are on the march to return ultra-loose monetary policy and accommodative financial conditions to more normal levels. The trouble is, their destination is uncertain and the terrain may be shifting as they forge forward with higher interest rates.
