This is confusing!
Federal Reserve Chairman Jerome Powell said recently that interest rates are a “long way from neutral” and that rates might even have to go beyond neutral. Neutral is the point where borrowing costs are neither helping nor hurting the economy.
But Richard Clarida, the Fed’s vice chairman, claims that rates are already close to neutral.
Then there is Charles Evans, who is in charge of the Chicago Federal Reserve Bank. He said this week that the Fed needs to raise interest rates. Other Fed officials have also spoken up in various degrees of specificity on both sides of the issue.
So, which is it?