TIMIRAOS said two years ago, when the Fed began cutting, 10 policymakers
expected the terminal rate below 3%, seven above 3% and two at 3%. In the
current SEP only one policymaker expects the long-run rate below 3%, 11 expect
it above 3% and six expect 3%. In 2029 projections from 17 respondents, a
majority judge that to achieve 2% inflation (DISINFLATION) rates would need to
be at or above 3.6% — roughly the year-long rate level prior to this week’s hike
— underscoring upside risk to long-run rate estimates.
