The document discusses the expected terminal rate of the Fed's policy rate, which is closely tied to the neutral rate. It suggests that the neutral rate has fallen since the crisis but is expected to rise as growth headwinds fade. However, it will likely remain lower than pre-crisis levels. The market pricing of a terminal rate around 2% is seen as pessimistic, and as the market reprices, it will need to adjust its view on the terminal rate.
documents/vol00010-efta01459048-pdf.pdf
{"title":"TheHouseView Special – 9 December 2015","key_people":["Yellen","Fischer","Dudley"],"document_date":"2015-12-09","document_type":"tabular","document_subtype":"financial analysis","key_organizations":["Deutsche Bank","FOMC"],"reference_numbers":["DB-SDNY-0119259","SDNY_GM_00265443","EFTA01459048"]}