Ex Fed Pres.Mester :Believes neutral rate is higher than used to be in the past.

• Believes the neutral rate is higher than it used to be in the past
• The Funds rate is high relative to where inflation is currently
• Always want to keep monetary policy moving to where the economy is going.
• There is room to go in nominal funds rate before reaching the neutral rate.
• Fed has to be more forward-looking than the market
• I don’t think that much has changed in the economy
• A Fed policy maker time horizon is more longer term
• I would cut rates by 25 bps. A stop-and-go is not a good look for the Fed.
• The recent data has not changed the medium-term economic outlook

This article was written by Greg Michalowski at www.forexlive.com.