In a recent address, Federal Reserve member Miran shared insights on the current economic landscape, highlighting the importance of a forward-looking approach in Fed policy. The publication provides the following information: his remarks come at a time when inflationary pressures, particularly in the services sector, are under scrutiny.
Decrease in Services Inflation
Miran anticipates a notable decrease in services inflation, attributing this trend to demographic changes that are particularly evident in the housing market. He pointed out that as the population ages and shifts, the demand dynamics in housing could lead to lower inflation rates in this sector.
Neutral Interest Rate and Monetary Policy
Additionally, Miran mentioned that the neutral interest rate has now reached the lowest bounds of projections, indicating a potential shift in monetary policy. He also suggested that deregulation could play a crucial role in enhancing the economy's potential, allowing for more robust growth in the coming years.
