Independent Strategy

FOMC – Mirabile Dictu

The Fed (FOMC) believes it can get to its inflation target without sacrificing growth. I do too. But that means the neutral rate (r*) is 3.5% or higher. The dots do not show that. But the FOMC is going to have to debate that issue instead of ignoring it. Its own economists and a raft of academics will force the issue.

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