Below are key takeaways from the speech delivered by the Federal Reserve governor Lael Brainard at the Detroit Economic Club, Detroit, Michigan.
- Our challenge is to sustain full employment and inflation at 2 percent, which is likely to warrant continued gradual increases in the federal funds rate.
- With fiscal stimulus in the pipeline and financial conditions supportive of growth, the shorter-run neutral interest rate is likely to move up somewhat further, and it may well surpass the longer-run equilibrium rate for some period.
- Fed’s published longer-run neutral rate estimate, now at 2.9pct, is not relevant for rate path.
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