Part 1

The Federal Reserve is Obsessed with the Neutral Rate. Here’s Why You Should Be Too.

Editor’s note: We hope our readers enjoyed learning about the Federal Reserve and interest rates. We will now go one step further and explain another key concept related to the Fed. 

Economists lose sleep over it. Central bankers get asked if we’re close to it. Most Americans don’t realize it, but their lives are quietly guided by it. 

The it here is the neutral rate of interest, also known as r-star or r*. 

Think of the neutral rate as kind of like the Force from ...

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Intermediate icon
Intermediate
Why The Mysterious R-Star Should Be on Your Radar
4 Lessons
~7 mins in total
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