The Economy & the Fed

Neutral Interest Rate

The interest rate that neither speeds the economy up nor slows it down once inflation is at the Fed's goal. No one can observe it directly; each Fed official estimates it, and the median of those estimates is published four times a year as the "longer run" federal funds rate in the Fed's Summary of Economic Projections. When the Fed's range sits above neutral, policy is restrictive, meant to cool demand and inflation; below it, accommodative.

Educational information, not investment advice. See it applied across the screener →