Reported 5 months ago
Federal Reserve Governor Christopher Waller discussed the potential for a key underlying interest rate, known as R-star, to increase in the future after years of decline due to various factors such as strong demand for U.S. government debt and regulatory changes. Waller mentioned that if R-star rises, it could signal a shift to a higher interest rate environment, impacting monetary policy with higher borrowing costs. Despite uncertainties surrounding R-star, some Fed officials have noted it may not heavily influence short-term policy decisions. Waller also highlighted the importance of the U.S. dollar as the world's primary reserve currency but expressed concerns about the sustainability of the current U.S. government borrowing trajectory.
Source: YAHOO