Odd Lots · Thursday, August 27, 2026
Kansas City Fed President Jeffrey Schmid suggested that 'R-star,' the neutral rate of interest, may be normalizing but could be at a higher base level than pre-2008. He indicated that current interest rates feel fairly accommodative, and the Fed continues to discuss the relationship between R-star and current yield curve levels.
“So, I think actually things are normalizing when it comes to our star. However, I would also say that we may be in a higher position base level of our star than we were back even pre-08. So yeah, I think from my standpoint personally, I think we're at a fairly accommodative place for rates right now.”
“And I think we continue to talk about the nature of our star relative to where the yield curve and rates are today. But for me, I think things are pretty accommodative.”