Fed policy rules currently prescribe higher rates, Greg Ip notes

Fed policy rules currently prescribe higher rates, Greg Ip notes
Fed rules prescribe higher rates now

Greg Ip points out that the Taylor rule and other policy frameworks referenced in the Federal Reserve's monetary policy report indicate that the federal funds rate should be higher than it currently is.

He adds that the current gap between the prescribed and actual interest rate is similar to the gap seen in 2019, and much smaller than the disparity during 2021 and 2022.

Greg Ip previously commented on Fed communication, noting in one article that Kevin Warsh declined to discuss the future path of U.S. interest rates. He has also analyzed price measures, observing that core CPI inflation is significantly lower than core PCE inflation and detailing the reasons for their divergence. Ip's coverage often focuses on the reasoning behind monetary policy decisions and communication.

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