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NEW YORK, Sept. 28 (Reuters) – The US Federal Reserve's main reserve on rising interest rate theory said on Friday that it was becoming increasingly difficult to estimate this. "neutral" level as the US central bank continued to tighten its policy. .
"I continue to hope that further gradual increases in interest rates will best support" the economy and its "very solid" outlook for next year at least, said John Williams, Fed Chairman in New York, in front of a forum of economists and students.
While the Fed, which has raised its key rate above 2% this week, continues to increase, it makes sense to no longer focus on normalizing the direction of monetary policy in relation to at a "neutral" interest rate of reference, often referred to as "star," & # 39; he said.
The idea of an estimated neutral rate – which leaves inflation and unemployment at levels of equilibrium, sometimes called r * – has sometimes dominated the debate over the Fed's determination to tighten policy following the recent economic recovery.
Williams was one of the authors of this theory. However, he said Friday that he had sometimes received "too much attention" – a sentiment that echoes recent comments downplaying the importance of such monetary models on the part of the president of the Fed, Jerome Powell. (Report by Jonathan Spicer edited by Chizu Nomiyama)
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