Erste Asset Management Investment Blog

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Outlook: Development of the neutral real interest rate
Outlook: Development of the neutral real interest rate
(c) Jim Watson / AFP / picturedesk.com

Outlook: Development of the neutral real interest rate

This year brought a turning point in the monetary policy of the major central banks. The crucial question is whether this turning point is cyclical or structural. It is therefore worth taking a look at the neutral interest rate, as this captures structural macroeconomic changes.

High Inflation – likely to emerge?
High Inflation – likely to emerge?
(c) unsplash

High Inflation – likely to emerge?

At the beginning of September, the FED announced a significant change in their policy: They officially announced the implementation of “average inflation targeting”. This allows to have a higher inflation rate for a period of time instead of being closely held to the target inflation rate of 2%.
Why did the FED announce this shift in its policy? Is inflation returning in the agenda? In this article, we intend to show the policy requirements for high(er) inflation.