Name: Lael Brainard

Summary: Normalizing Monetary Policy When the Neutral Interest Rate Is Low: "The lower neutral rate means the normalization of the federal funds rate is likely to follow a more gradual and shallower path than in previous cycles, although the actual path will be determined by economic conditions. It also implies that the likelihood of the federal funds rate hitting the zero lower bound will be persistently greater than it has been previously, which could make it more difficult to achieve our objectives of full employment and 2 percent inflation. With the nominal neutral interest rate lower than in the past, and with policy options being more limited if conditions deteriorate than if inflationary pressures accelerate, the asymmetry in risk-management considerations counsels a cautious and gradual approach."

Lean: Dovish

Substantially Similar to Prior Statements: No

Statement Date: December 1, 2015

Publication Date: December 1, 2015

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