BCA Insights

The Fed’s Low Neutral Rate View: Fact Or Folly? | BCA Research

Written by BCA Insights | Feb 24, 2023 3:20:00 AM
The possibility that the Fed could cut interest rates later this year if inflation falls more than they expect has caused a renewed focus by market participants on the Fed’s neutral rate views. Owing to its low neutral rate estimate, we can envision a scenario in which inflation decelerates enough to make the Fed feel comfortable easing monetary policy from current levels to a point that it believes is still tight.