More Kashkari: Neutral rate is likely higher now than where it was pre-pandemic

More from Fed’s Kashkari:

• Neutral right is likely higher than pre-Covid levels
• If US debt continues to increase then the neutral rate will also increase

Even though the neutral rate is thought to be higher than pre-pandemic, it is still lower than current Fed funds target. This is why feds Powell calls the decline in rates a recalibration. Rates at current levels are still thought to be restrictive – even with a higher neutral rate..

This article was written by Greg Michalowski at www.forexlive.com.