WHAT MATTERS MORE THAN 25 OR 50

The 'tourist examines why the Fed's long-run DOT estimate (r*) might be the most important part of today's FOMC meeeting

Everyone is focused on today’s FOMC meeting and whether it will be a 25 bps or 50 bps cut. Although that’s important, many are missing the more important larger-picture issue. The pace of cuts is mainly a function of the estimated level of restrictiveness of the current policy.

What do I mean by that?

The Federal Reserve has a dual mandate; to promote eco…