Guggenheim's Minerd Says the Fed Is 'Groping in the Dark'

The transcript discusses the Federal Reserve's stance on the neutral rate, suggesting it may be higher than necessary. It highlights the Fed's shift towards accommodation due to risks and inflation asymmetry. The Fed is no longer preemptive, aiming to generate inflationary pressures. The discussion also covers the Nehru and the lack of wage acceleration, questioning why Nehru is above 4%. There is an internal debate on the real neutral rate, with some committee members believing it could be negative, indicating the Fed is navigating unexplored territory.

What does the current neutral rate suggest about the Fed's stance on accommodation?

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How has the Fed's approach to inflation changed according to the discussion?

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What are the implications of the Fed groping in the dark regarding wage acceleration?

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What debate is occurring among the committee members regarding the neutral rate?

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Why is the Fed considered to be in unexplored territory?

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