September 22, 2025
Nonmonetary Forces and Appropriate Monetary Policy
Governor Stephen I. Miran
Delivered at the Economic Club of New York, New York, NY
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My First Speech as a Federal Reserve Board Member
Gratitude to the Economic Club of New York
I would like to thank the Economic Club of New York for the invitation to speak today. This is my first time addressing you in my new role as a member of the Federal Reserve Board. I aim to be transparent about my thinking, especially following last week's Federal Open Market Committee (FOMC) meeting.
Divergence in Policy Views
It should be clear that my perspective on appropriate monetary policy differs from some other FOMC members. I view current policy as very restrictive and believe it poses material risks to the Fed's employment mandate. In this speech, I will explain my reasoning.
Using Policy Rules as Guidance
There is no perfect method for determining the appropriate monetary policy at any given time. That said, rules of the Taylor type are a useful tool to gauge where the federal funds rate should be set based on prevailing macroeconomic conditions and outlook.
The Role of the Taylor Rule
The Taylor rule suggests policymakers focus on three key variables when determining the appropriate federal funds rate:
1. Inflation – Tracking price stability is a primary concern.
2. Neutral Rate of Interest – The rate that is neither expansionary nor contractionary when the economy is at full employment.
3. Output Gap – Often framed in terms of changes in employment.
While inflation and employment receive due attention from Fed officials, the neutral rate is often underappreciated. I find Taylor-type rules useful as indicators, though I do not follow them slavishly.
The Importance of Considering the Neutral Rate (r*)
Some argue that it makes sense to leave the neutral rate—r*—out of the policy discussion because it is unobservable and highly uncertain. However, other important economic variables, such as potential growth and the natural rate of unemployment, are also uncertain, yet they are regularly estimated, updated, and discussed.
Many r* estimates rely on empirical models that require extensive time-series data, which can make them backward-looking and slow to adjust. Failing to account for a rapidly changing neutral rate increases the risk of policy errors.
What Drives r*
R* reflects the balance of saving and investment in an economy and evolves over time due to demographics, productivity, fiscal policy, and other structural factors. In my view, past high immigration rates and large, fiscally driven reductions in net national saving—both of which tend to raise neutral rates—were insufficiently captured in previous estimates. As a result, monetary policy was not as tight as widely believed.
A similar dynamic may be occurring today, but in the opposite direction. Current shifts—such as border and fiscal policy changes—are exerting strong downward pressure on the neutral rate. Insufficiently accounting for these forces may lead some to underestimate how restrictive policy actually is.
Incorporating Nonmonetary Factors
In evaluating monetary policy, I will give explicit attention to nonmonetary factors that can meaningfully influence the appropriate stance. These include:
Shifts in border and immigration policy
Tax policy changes
Trade renegotiations
Regulatory dynamics
I will focus particularly on the factors that have changed most meaningfully over the course of 2025, and how they relate to my expectations for inflation, r*, and the output gap. My aim is to highlight elements I believe are currently underappreciate
d in policy discussions.
Nonmonetary Forces and Appropriate Monetary Policy
Governor Stephen I. Miran
At the Economic Club of New York, New York, New York
September 22, 2025
Introduction
I would like to thank the Economic Club of New York for inviting me to speak today. This is my first address in my new role as a member of the Federal Reserve Board, and I aim to be transparent about my thinking. Following last week's Federal Open Market Committee (FOMC) meeting, it should be clear that my view of appropriate monetary policy diverges from that of other FOMC members. I consider current policy very restrictive and believe it poses material risks to the Fed's employment mandate. I would like to explain why.
Determining Appropriate Monetary Policy
There is no perfect method for setting monetary policy. That said, Taylor-type rules provide a useful framework to gauge the appropriate federal funds rate based on current macroeconomic conditions and outlook. I find these rules helpful as indicators, though I do not follow them slavishly.
The Taylor Rule and Its Variables
The Taylor rule suggests policymakers consider three key variables:
1. Inflation – Monitoring price stability is essential.
2. Neutral Rate of Interest (r*) – The rate that is neither expansionary nor contractionary when the economy is at full employment.
3. Output Gap – Often framed through changes in employment.
While inflation and employment receive substantial attention, the neutral rate is often underappreciated.
The Role of the Neutral Rate (r*)
Some argue that r* should be excluded from policy discussions because it is unobservable and uncertain. However, other variables such as potential growth and the natural rate of unemployment are similarly uncertain but are frequently updated and analyzed.
Many r* estimates rely on empirical models that use extensive time-series data, making them backward-looking and slow to adapt. Failure to account for a rapidly changing neutral rate increases the risk of policy mistakes.
R* reflects the balance of saving and investment in an economy and evolves with demographics, productivity, fiscal policy, and other factors. Previously high immigration rates and large, fiscally driven reductions in net national saving—both of which raise neutral rates—were insufficiently considered in prior estimates. Monetary policy was thus not as tight as widely believed.
A similar dynamic may be occurring today, but in the opposite direction. Current border and fiscal policy changes are exerting strong downward pressure on r*, which may lead some to underestimate the restrictiveness of policy.
Incorporating Nonmonetary Factors
In my analysis, I explicitly consider nonmonetary factors that influence monetary policy, including:
Border and immigration policy changes
Tax policy adjustments
Trade renegotiations
Regulatory dynamics
I focus on the factors that have changed most meaningfully in 2025, particularly those affecting my expectations for inflation, r*, and the output gap—emphasizing those I believe are underappreciated.
My Policy Perspective
I do not aim for exact precision but rather a general ballpark. Based on my analysis, I believe the appropriate federal funds rate is in the mid-2 percent range, nearly 2 percentage points lower than current policy. While I am committed to bringing inflation sustainably back to 2 percent, maintaining policy at such a restrictive level poses significant risks for the Fed's employment mandate.
Policies Impacting Inflation
Housing and Rent Inflation
Housing is highly influential for Americans’ perception of the economy, representing nearly 16 percent of the PCE price index and over double that in the CPI.
Measured inflation incorporates rental inflation with a lag, meaning it remained elevated above market rents for several years. This “catch-up” effect from the spike in new rents in 2021–2022 has now largely closed. Current new rent indices indicate inflation
is well below all-tenant inflation, around 1 percent annualized.
Housing and Rent Inflation: Outlook
Rents for all tenants are expected to move toward current market rates as people relocate or renew leases. I anticipate that CPI rent inflation will decline from roughly 3.5 percent today to below 1.5 percent by 2027, implying a roughly 0.3 percentage point reduction in total PCE inflation, growing to 0.4 percentage points by early 2028. According to a Taylor rule, this translates to an appropriate federal funds rate roughly half a percentage point lower than current shelter inflation would imply.
While this view on rental inflation may seem optimistic, I believe forecasters have underestimated the impact of immigration policy on rent trends. Work by Albert Saiz finds an elasticity of rents with respect to immigrant occupants of about 1.5. Net immigration averaged roughly 1 million per year in the decade before the pandemic. Given that approximately 100 million Americans rent, net-zero immigration going forward could lower rent inflation by roughly 1 percentage point per year.
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Policies Affecting r*
Population Growth and Border Policy
Border policy is also influencing neutral rates. Steady-state population growth is a key determinant of r*, and U.S. policy has shifted from effectively open borders to potentially negative net migration. This interacts with an aging population, which increases the supply of capital and reduces investment demand. Analysis by Etienne Gagnon and colleagues suggests demographic changes have already lowered the neutral rate by over 1 percentage point since 1980.
Recent data indicate the U.S. population has grown by around 1 percent annually, largely due to illegal immigration. In the first half of this year, roughly 1.5 million illegal immigrants reportedly left the country, though this may overstate the true figure. Assuming some overcounting, 2 million illegal immigrants may have exited by year-end, reducing annual population growth from 1 percent to 0.4 percent. Research by Weiske and Ho estimates that a 1 percentage point drop in population growth reduces r* by 0.6 percentage points, implying a nearly 0.4 percentage point decline in the neutral fed funds rate from this demographic shift.
Labor market data and anecdotal evidence indicate border policy is having a major economic impact. While these effects may normalize over time, reduced population growth aligns with zero net immigration forecasts for 2026 and 2027. Similar debates previously centered on whether declining fertility in developed economies would push interest rates toward Japan’s low levels without substantial immigration—these dynamics remain relevant.
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Trade Policy, National Saving, and r*
Trade renegotiation and recent tax legislation also influence r*, primarily through their effect on national saving, which is the net supply of loanable funds.
Relatively small tariff changes have generated disproportionate concern about price effects. Based on elasticities and incidence theory, exporting nations may lower selling prices, but tariffs are also expected to increase national saving.
The Congressional Budget Office projects tariff revenues could reduce the federal budget deficit by over $380 billion per year over the next decade, shifting the supply–demand balance for loanable funds. According to estimates summarized by Rachel and Summers, a 1 percentage point change in the deficit-to-GDP ratio moves r* by nearly 0.4 percentage points. This 1.3 percent of GDP increase in national saving reduces the neutral rate by approxima
tely 0.5 percentage points.
Nonmonetary Forces and Appropriate Monetary Policy
Governor Stephen I. Miran
At the Economic Club of New York, New York, New York
September 22, 2025
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Housing and Rent Inflation
Outlook for Rent Inflation
Rents for all tenants are expected to move toward current market rates as people relocate or renew leases. I anticipate CPI rent inflation will decline from roughly 3.5 percent today to below 1.5 percent by 2027, implying a roughly 0.3 percentage point reduction in total PCE inflation, growing to 0.4 percentage points by early 2028. According to a Taylor rule, this translates to an appropriate federal funds rate roughly half a percentage point lower than current shelter inflation would suggest.
Immigration Policy and Rental Trends
Some may consider this outlook optimistic, but I believe forecasters have underestimated the impact of immigration policy on rent inflation. Research by Albert Saiz finds an elasticity of rents with respect to immigrant occupants of about 1.5. With net immigration averaging roughly 1 million per year before the pandemic, a shift to net-zero immigration going forward could reduce rent inflation by roughly 1 percentage point per year.
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Policies Affecting the Neutral Rate (r*)
Population Growth and Border Policy
Population growth is a key determinant of the neutral rate. U.S. border policy has shifted from effectively open borders to potentially negative net migration. These changes interact with an aging population, which increases the supply of capital and reduces investment demand. Analysis by Etienne Gagnon and colleagues suggests that demographic changes have already lowered r* by over 1 percentage point since 1980.
Recent data indicate that the U.S. population has grown around 1 percent annually, largely due to illegal immigration. In the first half of this year, roughly 1.5 million illegal immigrants reportedly left the country. Assuming some overcounting, it is plausible that 2 million may exit by year-end, reducing population growth from 1 percent to 0.4 percent. Research by Weiske and Ho estimates that a 1 percentage point drop in population growth reduces r* by 0.6 percentage points, implying a nearly 0.4 percentage point decline in the neutral fed funds rate.
Labor market data suggest that border policy is already affecting economic activity. While the effects may normalize over time, reduced population growth aligns with zero net immigration forecasts for 2026 and 2027. These dynamics remain an important factor for neutral rates.
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Trade Policy and National Saving
Impact of Tariffs
Trade renegotiation and tax legislation also influence r*, mainly through national saving, or the net supply of loanable funds. Small tariff changes have generated disproportionate concern, but tariffs are also expected to increase national saving.
The Congressional Budget Office (CBO) projects tariff revenues could reduce the federal budget deficit by over $380 billion per year over the next decade, shifting the supply–demand balance for loanable funds. Estimates summarized by Rachel and Summers suggest that a 1 percentage point change in the deficit-to-GDP ratio moves r* by roughly 0.4 percentage points. The 1.3 percent of GDP increase in national saving from tariffs would therefore reduce r* by about 0.5 percentage points.
Tariffs are not the only channel. Loans and loan guarantees from East Asian countries in exchange for low tariff ceilings total $900 billion, increasing credit supply by roughly 7 percent, which could further reduce r* by around 0.2 percentage points.
Impact of Tax Policy
The recent tax law also significantly affects national saving. The CEA estimates a $3.83 trillion increase in national saving over the next 10 years relative to the previous policy baseline, roughly 1.3 percent of GDP, implying a 0.5 percentage point reduction in r*.
The law is expected to stimulate annual investment increases of up to 10 percent, which would raise r* and the appropriate federal funds rate by roughly 0.3 percentage points. Future work with Board staff and updated forecasts will refine these estimates.
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Deregulation and Energy Policy
Regulatory burdens have become a material impediment to growth, restricting productivity and capacity while fueling inflation. Deregulation, by contrast, raises the neutral rate by increasing the marginal product of capital.
Analysis by Dawson and Seater shows that half of the output gains from deregulatory policy are channeled through improvements in total factor productivity (TFP), which drives living standards and real wages. Previous CEA research estimates that deregulatory policies may boost annual growth by 0.5 percent over 20 years, while new energy policies may add about 0.1 percent over 10 years.
Cumulatively, these policies could increase TFP by 3–9 percent, trans
lating to roughly a 0.1–0.2 percentage point increase in r*.
Policies Impacting the Output Gap
Tax Policy
Shifting focus from r* to the output gap, the third component of the Taylor rule, we consider actual production relative to the economy’s potential. Similarly, the employment gap measures the difference between the actual unemployment rate and the lowest sustainable rate that does not generate inflation.
While the recent tax and spending cuts passed by Congress increase net saving and reduce r*, they also influence the output gap in the opposite direction. The tax law is expected to expand the economy’s supply side, helping to mitigate inflationary pressures. Reduced business and individual tax rates encourage additional capital accumulation and labor supply, expanding both potential and actual GDP, which tends to leave the output gap relatively stable.
At the same time, aggregate demand is boosted by lower taxes on seniors and lower-wage workers, partially offset by cuts to entitlement spending and student lending. CEA calculations using CBO estimates show a static $80 billion reduction in revenue and a $130 billion reduction in annual spending over a decade relative to a pre-tax law baseline.
Despite spending cuts exceeding tax reductions, economic literature finds the tax multiplier larger than the spending multiplier, implying a short-run increase in actual output of approximately $50 billion, or 0.2 percent of GDP in the output gap. Under a standard Taylor rule, this corresponds to an increase in the appropriate federal funds rate of roughly 0.1 percentage point. Using the balanced-approach rule—which doubles the weight on the output gap and was favored by former Chairwoman Janet Yellen—the increase would be about 0.2 percentage points.
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Regulatory and Energy Policies
Deregulatory and energy policies also affect the output gap. Typically, removing a regulatory barrier immediately raises potential output, but actual output takes time to adjust. I expect recent deregulatory and energy policies to follow this pattern.
Using the previously discussed TFP estimates, these policies are projected to exert 0.2 to 0.6 percentage points of downward pressure on the output gap over the next few years. Under a standard Taylor rule, this translates into a 0.1 to 0.3 percentage point reduction in the appropriate policy rate, or roughly double that under the bala
nced-approach rule.
Summing It All Up
To bring everything together, we first need to adjust the neutral interest rate, , relative to a baseline that accounts for the factors I’ve outlined. Various models, including those reviewed by Gianluca Benigno and colleagues, suggest a median real estimate for of 1.3 percent, with a range between roughly 1 and 2 percent. Applying Okun’s law, assuming a natural unemployment rate of 4 percent and PCE inflation at 2.6 percent, the standard Taylor rule implies that the appropriate nominal federal funds rate—before accounting for today’s additional forces—should be around 3.9 percent. A more balanced approach points to roughly 3.6 percent. These figures are fairly close to the levels currently set by the FOMC.
Including the shocks I’ve considered, the new real appears to be 1 to 1.2 percentage points lower than previous estimates—bringing it close to zero. That may seem surprisingly low, but it’s important to interpret these models as informative guides rather than precise forecasts. As I’ve noted, these models often struggle to fully capture the impact of policy changes at the frequency we observe. I suspect that existing backward-looking estimates of are too high because they understate the effects of recent fiscal and border policy shifts that are putting downward pressure on the neutral rate.
Financial markets offer another perspective. My preferred market-based measure of is the five-year, five-year-forward rate on U.S. Treasury Inflation-Protected Securities, currently around 2.3 percent. Applying the new policy pressures, this implies a real of roughly 1.1 percent.
Factoring in inflation and output gaps along with the median model-implied , the standard Taylor rule points to a fed funds rate near 2 to 2.25 percent. A balanced approach suggests a slightly lower rate, around 1.5 to 2 percent. If we instead rely on the market-implied , these estimates rise by roughly one full percentage point.
To mitigate the risk that the model-implied rate is too low, I assign it a two-thirds weighting and give the market-implied a one-third weighting. Part of the rationale for assigning less weight to market pricing is that it may reflect a policy premium accounting for trade-policy uncertainty. Using this blended approach yields an appropriate fed funds rate of about 2 percent under the balanced rule and 2.5 percent under the standard rule, though these simple calculations do not fully capture timing issues.
I want to stress that this is not a claim to high precision—assumptions and approximations are inevitable in economics. Still, it is necessary to stake out a position, and this represents my best estimate.
The bottom line is that monetary policy is already well into restrictive territory. Maintaining short-term rates roughly 2 percentage points too high risks unnecessary layoffs and elevated unemployment. Thank you for the opportunity to share my current thinking on monetary policy; I welcome any questions.
Table: Federal Funds Rate Implications
Measure Standard Taylor Rule Same under Both Rules Balanced-Approach Taylor Rule
Ex-Ante Appropriate FFR (bps) 426 — 396
Effect on Optimal FFR of… Low High Low
Forces Affecting Inflation (πₜ):
Rent disinflation — — -47
Forces Affecting r*
Deregulation + energy — — 4
OBBB — — -6
Population growth — — -36
Trade policy — — -62
Forces Affecting Output Gap (yₜ-ȳ):
Deregulation + energy -11 -32 —
OBBB 8 8 —
Ex-Post Appropriate FFR (Midpoint, bps) 249 — 206
Note: The ex-ante neutral rate, , is weighted two-thirds from model-based estimates (Benigno et al., 2024) and one-third from the market-implied rate derived from Treasury Inflation-Protected Securities. FFR = federal funds rate. OBBB = One Big Beautiful Bill.
1. The views expressed are my own and do not necessarily reflect those of my colleagues on the Federal Reserve Board or the Federal Open Market Committee. Return to text.
2. Lara Loewenstein, Jason Meyer, and Randal J. Verbrugge (2024), “New-Tenant Rent Passthrough and the Future of Rent Inflation,” Economic Commentary 2024-17 (Cleveland: Federal Reserve Bank of Cleveland, October). Return to text.
3. This figure comes from the Bureau of Labor Statistics’ new-tenant repeat rent survey, excluding the most recent, high-noise observation. A similar estimate is obtained from a weighted average of single-family data from Cotality and multifamily data from Apartment List. Return to text.
4. I use expectations for future economic variables throughout to indicate the appropriate policy stance today, reflecting the uncertain lags with which monetary policy affects the economy. Return to text.
5. Albert Saiz (2003), “Room in the Kitchen for the Melting Pot: Immigration and Rental Prices,” Review of Economics and Statistics, vol. 85 (August), pp. 502–21. Return to text.
6. Congressional Budget Office (2025), The Demographic Outlook: 2025 to 2055 (Washington: CBO, January). Return to text.
7. Etienne Gagnon, Benjamin K. Johannsen, and David Lopez-Salido (2021), “Understanding the New Normal: The Role of Demographics,” IMF Economic Review, vol. 69 (June), pp. 357–9
0. Return to text.
7. Etienne Gagnon, Benjamin K. Johannsen, and David Lopez-Salido (2021), “Understanding the New Normal: The Role of Demographics,” IMF Economic Review, vol. 69 (June), pp. 357–90. Return to text.
8. Jeffrey S. Passel and Jens Manuel Krogstad (2025), “U.S. Unauthorized Immigrant Population Reached a Record 14 Million in 2023,” Pew Research Center, August 21. Return to text.
9. Sebastian Weiske (2016), “Population Growth, the Natural Rate of Interest, and Inflation,” working paper, Goethe University Frankfurt; Paul Ho (2024), “How Do Demographics Influence r?”* Economic Brief 24-18 (Richmond: Federal Reserve Bank of Richmond, June). Return to text.
10. Phill Swagel (2025), “An Update About CBO’s Projections of the Budgetary Effects of Tariffs,” CBO Blog, August 22. Return to text.
11. Łukasz Rachel and Lawrence H. Summers (2019), “On Secular Stagnation in the Industrialized World,” NBER Working Paper Series 26198 (Cambridge, MA: National Bureau of Economic Research, August). Return to text.
12. Mehrotra and Waugh (2025) estimate that a tariff shock would initially reduce short-term interest rates by roughly 30 basis points. The policy rate would then gradually rise over five years, ending slightly above the initial steady state. See Neil Mehrotra and Michael E. Waugh (2025), “Tariffs, Trade Wars, and the Natural Rate of Interest,” NBER Working Paper Series 34206 (Cambridge, MA: National Bureau of Economic Research, September). Return to text.
13. The $900 billion cited represents only a portion of the more than $3 trillion in U.S. investment pledges from foreign countries in recent months. While this investment would likely stimulate new economic activity, most of it would probably leave the supply–demand balance for loanable funds—and thus —largely unchanged. Apart from the $900 billion in loan guarantees, much of the pledged investment is direct investment, which tends to have less impact on despite a positive effect on output. For evidence that foreign direct investment does not crowd out domestic investment in developed OECD countries, see Emre Gokceli, Jan Fidrmuc, and Sugata Ghosh (2022), “Effect of Foreign Direct Investment on Economic Growth and Domestic Investment: Evidence from OECD Countries,” European Journal of Business Science and Technology, vol. 8 (2), pp. 190–216. Return to text.
14. Research by Bachas, Kim, and Yannelis (2021) shows that loan guarantees increase credit supply, and their estimated elasticity implies that guarantees of this magnitude would raise credit supply by roughly 7 percent. To translate this into an effect on , one can use estimates of the interest elasticity of investment demand and the interest elasticity of saving supply. The former is derived from the UCC elasticity of investment and the interest elasticity of the UCC, which together yield an interest elasticity of investment. Using parameters from the Council of Economic Advisers (2025c), this results in an estimated elasticity of approximately –0.3. Estimates from Boskin (1978) are applied for the interest elasticity of saving, with multiple estimation strategies yielding values centered around 0.3. See Natalie Bachas, Olivia S. Kim, and Constantine Yannelis (2021), “Loan Guarantees and Credit Supply,” Journal of Financial Economics, vol. 139 (March), pp. 872–94. Return to text.
15. Michael J. Boskin (1978), “Taxation, Saving, and the Rate of Interest,” Journal of Political Economy, vol. 86 (April, part 2), pp. S3–S27; Council of Economic Advisers (2025c), “The One Big Beautiful Bill: Legislation for Historic Prosperity and Deficit Reduction,” white paper (Washington: CEA, June). Return to text.
16. The OBBB is likely to have three effects relevant for determining the optimal federal funds rate: (1) reduced deficits increase national saving, lowering ; (2) higher investment demand raises ; and (3) consumption multiplier effects temporarily boost actual output relative to potential output, as discussed in a subsequent section. Return to text.
17. Relative to the pre-law, current-policy baseline. Return to text.
18. Deregulation likely has two effects relevant for appropriate policy: (1) increased total factor productivity (TFP) raises the marginal product of capital, thereby increasing ; and (2) deregulation accelerates potential output growth relative to actual output. Return to text.
19. A standard Cobb–Douglas production framework implies that a increase in TFP should induce approximately a increase in . Return to text.
20. John W. Dawson and John J. Seater (2013), “Federal Regulation and Aggregate Economic Growth,” Journal of Economic Growth, vol. 18 (June), pp. 137–77. Return to text.
21. Council of Economic Advisers (2025a), “The Economic Benefits of Current Deregulatory Efforts,” PDF white paper (Washington: CEA, June); Council of Economic Advisers (2025b), “The Economic Benefits of Unleashing American Energy,” PDF white paper (Washington: CEA, July). Return to text.
22. This calculation relies on the interest elasticity of investment from Council of Economic Advisers (2025c) and the interest elasticity of saving from Boskin (1978). The increase in is measured from a baseline of 1.5 percent. While other factors, such as developments in artificial intelligence, may affect productivity growth, this estimate assumes that current trends continue except for the policy shocks discussed here. Return to text.
23. Ramey’s literature review finds an average tax multiplier of –1.78 and an average government spending multiplier of 0.74; see Valerie A. Ramey (2019), “Ten Years after the Financial Crisis: What Have We Learned from the Renaissance in Fiscal Research?” Journal of Economic Perspectives, vol. 33 (Spring), pp. 89–114. Return to text.
24. Janet Yellen (2017), “The Economic Outlook and the Conduct of Monetary Policy,” speech delivered at the Stanford Institute for Economic Policy Research, Stanford University, Stanford, CA, January 19. Return to text.
25. A persistence coefficient of 0.89 per quarter is estimated using a simple AR(1) regression on the output gap over time. Return to text.
26. Gianluca Benigno, Boris Hofmann, Galo Nuno, and Damiano Sandri (2024), “Quo Vadis, r? The Natural Rate of Interest after the Pandemic,”* BIS Quarterly Review (March), pp. 17–30. Return to text.
27. All calculations in this paragraph summarize the prior calculations in this speech and add them to either of the initial estimates. Return to text.
28. Slight discrepancies between this range and the forecasts in the Summary of Economic Projections are due to timing: some forces analyzed affect the economy gradually, while others—such as the output gap—adjust over time. Return to text.
Last update: September 22, 2025
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