Fed’s Waller Says Monetary Policy Should Move Closer to Neutral Level

According to ChainCatcher News, citing Jinshi, Federal Reserve Board member Christopher Waller stated that U.S. monetary policy should be adjusted closer to a neutral interest rate level, which he estimates to be around 3%.
Waller noted that the current federal funds rate range of 3.5% to 3.75% remains somewhat restrictive relative to this neutral benchmark. His comments suggest that there may be room for policy easing if economic conditions continue to evolve in line with expectations, particularly with respect to inflation and growth dynamics.
The concept of a neutral rate refers to a level of interest rates that neither stimulates nor restrains economic activity. Waller’s remarks indicate a view that policy may no longer need to remain as tight as it has been in recent periods, depending on incoming data.
Markets are closely watching statements from Federal Reserve officials for clues about the future path of interest rates. Waller’s comments may reinforce expectations that the Fed is gradually shifting its focus from aggressive tightening toward fine-tuning policy settings as it seeks to balance inflation control with economic stability.#FedKeepsRatesUnchanged