Fed's Daly: Raising Rates Above Neutral Likely in 2023

The transcript discusses the concept of the neutral rate, which is crucial for economic stability. It explains the dual mandate of price stability and full employment, emphasizing the importance of adjusting policy rates to manage inflation. The speaker highlights the challenges in estimating the neutral rate and the need for potential rate increases above neutral to control inflation. The discussion also covers factors affecting inflation, such as supply chain disruptions and labor market recovery, and the importance of being prepared to ensure price stability.

What dual mandate is mentioned in relation to economic policy?

What is meant by 'removing the accommodation' in the context of economic policy?

How does the concept of the neutral rate of interest influence economic policy decisions?

What factors could lead to a more restrictive economic policy if inflation continues to rise?

What are the potential consequences of not addressing inflation effectively?