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20th Oct 2015 09:00U.S., Economic Monitor

In the September forecasts, the median forecast of FOMC members for the long-term fed funds rate was 3.5%. Their long-term inflation forecast is 2%-- it has to be 2%, otherwise they would be forecasting permanent failure to meet their policy objectives -- implying a real rate of 1.5%. This is well below the long-run average; from 1960 through 2005, the real funds rate--the nominal rate less the rate of increase of the PCE deflator--averaged 2.4%.

fed interest rates markets fomc inflation leverage recession gdp nahb

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Keywords for: 20 Oct. 2015 Could the Terminal Funds Rate be Much Higher Than Markets Think?

fed, interest rates, markets, fomc, inflation, leverage, recession, gdp, nahb,