Governor Waller Shares Insights on r*

Governor Waller's speech delves into the concept of r, the real policy interest rate that neither stimulates nor restricts economic activity with inflation anchored at the central bank's target. He discusses the factors that have driven the decline in r over the past 40 years, such as increased demand for safe, liquid assets like U.S. Treasuries, and considers whether these factors might reverse, potentially causing r to rise in the future. Waller emphasizes the importance of understanding these dynamics for effective monetary policy and economic forecasting.