LyrArc Article Gist
Powell thinks that rates should have been higher- what is called the neutral rate for stable inflation and employment should have been higher some years back. This rate is closer to 4 percent. It also means fewer or no interest rate cuts in 2025. The Fed funds rate is now 4.3%.
Powell - "We only know it by its works." Fed chair Powell rejects a theory type approach, you only know it when it works for average Americans.
One has also to factor in how interest rates reitred people who depend on interest rate for what they make on their savings. This also matters to new savers who are younger people.
Powell thinks that rates should have been higher- what is called the neutral rate for stable inflation and employment should have been higher some years back. This rate is closer to 4 percent. It also means fewer or no interest rate cuts in 2025. The Fed funds rate is now 4.3%.
Powell - "We only know it by its works." Fed chair Powell rejects a theory type approach, you only know it when it works for average Americans.
One has also to factor in how interest rates reitred people who depend on interest rate for what they make on their savings. This also matters to new savers who are younger people.
