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Fed: We really, really, really aren’t going to raise rates soon…
Jerome Powell’s speech at the virtual Jackson Hole Symposium tells us that the Fed have decided on a formal adoption of "average inflation targeting", which obviously allows inflation to rise above 2% "for some time" to compensate for periods when it has undershot. In their Review of Monetary Policy, the Fed have been motivated by their assessment that the “new normal” for the US economy has changed. Firstly, their estimate for long-run US growth rates have declined due to weaker productivity and an ageing population. Secondly, estimates for the neutral interest rates (where growth is at trend and inflation ... (full story)