The neutral rate (the rate where policy is neither restrictive nor stimulative) is probably higher than the Fed believes it to be (Fed thinks ~2.5%); this implies the Fed can keep rates higher without crushing the economy, reducing recession risk from extended tightening.
factualpending
Speaker
Neil DuttaEvidence Quote
“I also think neutral rates are probably somewhat higher you know right this is right like what is the break even for you know where the economy slows down versus speeds up and you know and I think that number is probably higher than the fed the FED believes”
Created: 8/12/2026, 6:02:32 PM
My Notes
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