Fed's Janet Yellen: Taylor Rule and Fed Funds Rate

The video discusses the relationship between the Federal Reserve's interest rates and the Taylor rule, highlighting a significant discrepancy between the two. It explains that the current Fed funds rate is lower than what the Taylor rule suggests, due to economic headwinds. The concept of a neutral level of the Fed funds rate, which aligns with full employment, is explored, noting its depression post-financial crisis. The discussion also touches on secular stagnation and the hope for a rise in rates over time.

What factors are mentioned as contributing to the divergence between the current Fed rate and the Taylor rule?

What is the significance of the term 'secular stagnation' as discussed in the text?