Alan Blinder on Fed Decision, Bank Financial Stability

The transcript discusses the Federal Reserve's policy challenges, focusing on productivity, interest rates, and inflation. It highlights the internal divisions within the Fed, particularly between hawkish and dovish members, and the implications of these divisions on interest rate decisions. The conversation also touches on financial stability concerns due to low interest rates and the Fed's struggle to understand economic performance. The discussion concludes with an analysis of market reactions to Fed signals and the potential need for interest rate normalization.

How does the current neutral real interest rate compare to its long-run value?

What are the potential risks associated with negative interest rates according to the discussion?

What arguments do dissenters present regarding the Fed's approach to interest rates?