Express
Fed's Harker: Neutral Interest Rate May Be Higher Than Widely Expected
Summary: According to sources, the Federal Reserve's Harker stated that positive inflation data in November may have been distorted by the government shutdown in October and the first half of November, underestimating price growth over the past 12 months. While the Labor Department reported a 2.7% year-on-year increase in CPI in November, adjusted estimates for data ...
According to sources, the Federal Reserve's Harker stated that positive inflation data in November may have been distorted by the government shutdown in October and the first half of November, underestimating price growth over the past 12 months. While the Labor Department reported a 2.7% year-on-year increase in CPI in November, adjusted estimates for data collection difficulties bring it closer to the widely expected levels of 2.9% or 3.0%. Furthermore, Harker's concern about cutting interest rates is based on her belief that the neutral interest rate level may be higher than widely believed, and the economy itself is poised for robust growth next year. The neutral interest rate cannot be directly observed but can be inferred from the state of the economy.
Tags:
Link: Fed's Harker: Neutral Interest Rate May Be Higher Than Widely Expected [Copy]
