Behind the Markets Podcast · Friday, September 4, 2026
The speaker suggests that the current Fed funds rate is considered 'easy' because people are borrowing readily. This is attributed to the short rate being kept below the neutral or natural rate, making borrowing cheap and encouraging more economic activity.
“I don't regard the current rate is restrictive. Well, you could maybe say the current rate, I'm talking about Fed funds rate is easy. People are borrowing a lot at this rate. They're not being held back from borrowing at their rate.”
“And that's what basically causing money to go up, right? When you keep the short rate below what's called the neutral rate or the natural rate, whatever you want to do it, it causes people to borrow more because, you know, it's cheap relative to the investment opportunities basically out there.”