The Federal Reserve keeps baby-stepping toward a "normalization" of monetary policy. But just what is normal? As seen in the Fed's latest quarterly Summary of Economic Projections (SEP) compiled at its June 17-18 Federal Open Market Committee meeting, the definition keeps changing. Fed officials' estimates of the longer run funds rate, also known as the equilibrium or normal rate, have continually fallen during the last few years. In January 2012 when the FOMC first began announcing funds rate projections, 16 of 17 participants put the longer run rate at 4% or higher, with six estimating it at 4.5%. Only one had it at 3.75% or lower.
展开▼
