What is the Fed’s NATURAL RATE?

So, all things being equal, what is the Federal Reserve’s “natural rate”? The ideal rate that creates the so-called “three bears economy”…not too hot, not too cold.  Used to be around 5%, but many seem to think it’s more around 2-3% today. Why does this matter?  Because it tells a lot whether the Fed wants to raise rates or lower them (long term) and where we might be headed with our home and consumer loans in the near term.  Our hosts Hamid and Fay Hamadanchy then dive into some more “macro economic trends” that factor into those Fed decisions (mainly  the jobs report and “consumer demand”) and how perplexed they are that job growth has been slowly but steadily growing since “The Great Recession” (except for THIS week’s poor performance) while consumer demand remains stubbornly weak. What’s going on? Find out in this week’s fascinating look at housing prices and loan rates as they try and peer into the Fed’s crystal ball and see where we headed this year.  Only on Orange County’s only community radio station, www.OCTalkRadio.net.

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