MNI BRIEF: Inflation Risks Skewed To Upside - Fed's Musalem

MNI BRIEF: Fed's Musalem Calls For Patient Approach To Policy

MNI BRIEF: EU Sees Orban Workaround At Defence Summit

MNI BRIEF: Republicans Urge Filling Fed Supervision Slot Soon

MNI BRIEF: US Factory Prices On The Rise Again - ISM

MNI China Daily Summary: Monday, March 3

EZ/UK Bond Supply Calendar: Belgium Syndication, NE DDA

EZ/UK T-Bill Calendar: Spain, Belgium, ESM Auction on Tuesday

MNI: US JAN CONSTRUCT SPENDING -0.2%

GERMANY: Official Interim Election Results Tilt Towards Missing BSW & FDP

GERMANY: Economy Ministry Lowers 2025 Growth Forecast As Expected

© 1982-2025 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

MNI BRIEF: R-Star Likely Rose Post-Pandemic -NY Fed Blog

USCentral Bank NewsPolicy NewsFederal ReserveEM Policy NewsEM BriefBriefStoryNorth America

MNI (WASHINGTON) - New estimates of the natural rate of interest or r-star show the measure has likely risen by a quarter or half percentage point since the pandemic, according to a blog co-authored by New York Fed President John Williams, published Monday. R-star is the real short-term interest rate expected to prevail when an economy is at full strength and inflation is stable.

The Holston-Laubach-Williams real-time estimate of r-star rose to a little above 1% before falling back to about 0.75%, with a net increase of a quarter percentage point from 2019 to 2024, according to the post. A different measure, the Laubach-Williams estimate of r-star show a half a percentage point increase during this period. That analysis is in line with the FOMC's estimates of the longer run fed funds rate, which has risen about half a point over the past year. (See: MNI PODCAST: FedSpeak: Ghamami Sees Higher R-Star On Deficits)

153 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

MNI (WASHINGTON) - New estimates of the natural rate of interest or r-star show the measure has likely risen by a quarter or half percentage point since the pandemic, according to a blog co-authored by New York Fed President John Williams, published Monday. R-star is the real short-term interest rate expected to prevail when an economy is at full strength and inflation is stable.

The Holston-Laubach-Williams real-time estimate of r-star rose to a little above 1% before falling back to about 0.75%, with a net increase of a quarter percentage point from 2019 to 2024, according to the post. A different measure, the Laubach-Williams estimate of r-star show a half a percentage point increase during this period. That analysis is in line with the FOMC's estimates of the longer run fed funds rate, which has risen about half a point over the past year. (See: MNI PODCAST: FedSpeak: Ghamami Sees Higher R-Star On Deficits)