Part 3

What is the relationship between the neutral rate and regular interest rates? 

At its latest meeting, the Fed held interest rates steady around 4.3%, pausing for the first time since September. Sticky inflation and a strong labor market has made it harder for the Fed to justify bringing down rates any lower. 

If current rates are higher than the neutral rate, it signals that we are in a contractionary environment—where economic growth will tend to slow, the unemployment rate would rise and rate of inflation would be muted or decline, according to an article publ...

Unlock This Free Guide from Tom Lee’s FSI Academy

Enter your email to read this guide

In addition to your unlocked guide, you will receive our weekly market newsletter FSI Snapshot, as well as occasional updates and offers. You can unsubscribe at any time. For more information, see our privacy policy.

Get unlimited access to Tom Lee’s Fundstrat research Start Free Trial
Already a member? Log in
Intermediate icon
Intermediate
Why The Mysterious R-Star Should Be on Your Radar
4 Lessons
~7 mins in total
Your Progress

Related Guides