An important question for monetary policymakers is, What policy stance, including the current setting of the federal funds rate, the current size and composition of the Fed’s balance sheet, and the expected paths of the funds rate and balance sheet, represents “neutral” — neither stimulating nor restraining the economy? In our Summary of Economic Projections (SEP), the participants in the Federal Open Market Committee (FOMC) estimate the longer-run level of the federal funds rate — that is, the overnight nominal interest rate that best represents neutral in the longer run, once the various shocks that are hitting the ... (full story)