Reevaluating the Neutral Interest Rate

With the Federal Reserve signaling it still plans to cut interest rates this year, has the inflation threat really abated? Heightened optimism about a soft landing has cooled somewhat as inflation at the start of the year has shown signs of persisting. What happens next will have big political implications too. In an election year, more voters seemingly have a negative opinion of how Joe Biden is handling the economy. If interest rates don’t fall appreciably, it won’t help his re-election prospects. On this episode of the Free Expression podcast, former Obama White House chief economist Jason Furman tells Gerry Baker why he’s concerned about continuing inflation risks, how rising mortgage rates are causing so much pessimism in households nationwide, and what he thinks the Fed will do next. 

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