Rethinking the Fed: Investors Await Yellen's Speech

The transcript discusses the Federal Reserve's ongoing reevaluation of its monetary policy framework, focusing on the concept of a neutral rate and the historical influence of the Taylor rule. It highlights the challenges posed by economic shocks and the evolving nature of the US economy. The speaker anticipates Janet Yellen's speech at Jackson Hole, which will address the Fed's policy toolkit. The discussion also covers the Fed's narrative and its impact on market dynamics, emphasizing a shift towards a more nuanced approach to employment and inflation.

What are the key assumptions that the Fed has been rethinking regarding inflation?

How has the Fed's approach to the neutral funds rate changed over the years?

What does the speaker anticipate regarding economic shocks in the future?

What are the two main goals of the Fed as mentioned in the text?

In what ways has the Fed's narrative changed in relation to market pricing?