with Ben May and Daniel Harenberg
October 20, 2022
With US policy rates rising until inflation is clearly under control, we ask what will happen once inflation normalizes. To help answer this, we estimated the US neutral interest rate and the extent to which it has shifted due to fundamental, structural forces. We find that the neutral rate, having fallen strongly since 1970, will remain low through 2050, and we explain and quantify how nine secular forces are behind this.