Latest / The Federal Reserve Podcast with Fexingo: Interest Rates, FOMC Meetings, and Monetary Policy
Why the Fed Is Rethinking the Neutral Rate This Summer
The neutral rate of interest, or r-star, is the Fed's invisible anchor for monetary policy. In this episode, Lucas and Luna break down why the New York Fed's latest estimate of r-star is rising and how that could reshape the rate path mid-2026. They tie it to the ten-year yield's recent jump to 4.68 percent, the breakeven inflation rate dipping to 2.26 percent, and the puzzling gap between falling CPI and rising PCE. If the neutral rate is higher, the current 3.63 percent fed funds rate may not be as restrictive as the market thinks. A sharp, numbers-driven look at the one…
The skinny
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