Briefing
Will Interest Rates Remain Elevated Even as Monetary Policy Normalizes?
Abstract: Long-term bond yields indicate an increase in long-run r* of between 1.2 and 1.4 percentage points relative to its pre-pandemic level. This increase in r* is compatible with underlying economic shifts following the pandemic, including a reduction in personal savings by U.S. households. Evidence suggests that, even as inflation returns to trend and monetary policy normalizes, policy rates may remain above their prepandemic level.
Access Documents
File(s):
File format is text/html
https://www.richmondfed.org/publications/research/economic_brief/2024/eb_24-28
Description: Briefing
Authors
Bibliographic Information
Provider: Federal Reserve Bank of Richmond
Part of Series: Richmond Fed Economic Brief
Publication Date: 2024-08
Volume: 24
Issue: 28