But coupled with the anticipated path of inflation, those projections actually indicate monetary policy will grow more restrictive through 2024 on a "real" or inflation-adjusted basis.
It's a nuance undergirding why the Fed sees inflation continuing to fall through next year and unemployment rise despite expected lower interest rates.
And in fact, that seems to be what many on the Fed intend: A real policy rate of interest that gradually tightens next year even as the "nominal" rate printed in its policy statement declines.
Reuters Graphics Reuters GraphicsREAL VS NOMINALUnder the median projections provided this week, monetary policy actually grows slightly more restrictive next year.
By the end of 2024 that spread actually widens to 2%, as the interest rate declines but the rate of inflation falls more sharply.
Persons:
Jerome Powell nodded, We're, Howard Schneider, Dan Burns, Andrea Ricci
Organizations:
. Federal, U.S, Reuters Graphics Reuters, Silicon Valley Bank, Thomson
Locations:
Silicon