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Strategies & Market Trends : Humble1 and Swing Trading Friends

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To: dospesos who wrote (31327)2/4/2019 2:58:23 AM
From: elmatador  Read Replies (1) of 41023
 
The neutral rate of interest is much lower than in the past and economists have to get the grips of it. Capitalism is highly adaptable. It will adapt to a lower neutral rate of interest.

Economists tend to believe that it is around 5 per cent, although Morgan Stanley estimates that it is currently under 3 per cent.

The Fed’s Mysterious Pause
If the Federal Reserve is signaling a halt to rate increases, it could mean officials view the economy as fundamentally fragile.
...
If the Fed thinks it’s done even if the economy performs as expected, that raises another, troubling possibility: that the neutral rate, adjusted for inflation, is only about 0.5%, compared with 2% in the past.


https://www.wsj.com/articles/the-feds-mysterious-pause-11548893175
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