Adriana Kugler, a Federal Reserve Governor and former U.S. Executive Director at the World Bank Group, dives deep into US monetary policy and its impact on inflation and labor markets. She discusses the Federal Reserve's balance sheet reduction and its implications for economic stability. Kugler also explains the concept of R-star, the neutral interest rate, and how it relates to productivity and government debt. The conversation highlights optimistic labor market trends while navigating the complexities of inflation targeting in today's economy.