Visar inlägg från februari, 2023

U.S. trade deficit in goods climbs to $91.5 billion

Big picture: The trade deficit has set fresh records for three years in a row, but it’s on track to narrow for the first time since 2019. Imports of goods rose to $265.3 billion Exports climbed to $173.8 billion. MarketWatch 28 February 2023 US Trade Gap Record in 2022 Goods and services shortfall increased 12.2% to $948 billion

America, China, and Russia are collectively sleepwalking down a path of conflict escalation

Three great powers – America, China, and Russia – all seem to be afflicted by a profound sense of historical amnesia. They are collectively sleepwalking down a path of conflict escalation, carrying high-octane fuel that could be ignited all too easily.  Just like 1914. Stephen S. Roach Project Syndicate 27 February 2023

Nästan inga nya bostadsrätter säljs, och snart går även hyresrätter med förlust

 I branschen talas om ”Tobin Q” – en kvot mellan marknadsvärde och investerat byggkapital som måste vara över 1. Med 20 procent prisfall på många bostäder och högre byggkostnader, har Tobin Q nu fallit till 0,76. Det vill säga att det nybyggda huset är mindre värt än vad det kostade att bygga. Johan Hellekant SvD 28 februari 2023 Tobins Q och Englunds R People are still buying homes The index of contract signings to purchase previously owned homes, increased 8.1%, far faster than the 1% forecast, beating all estimates and climbing the most since June 2020. John Authers  Isabelle Lee Bloomberg 28 February 2023  

The total value of US homes

After peaking at $47.7 trillion in June, the total value of US homes declined by $2.3 trillion, or 4.9%, in the second half of 2022.  That’s the largest drop in percentage terms since the 2008 housing crisis, when home values slumped by 5.8% from June to December. Bloomberg 22 februari 2023 The total market capitalization of the U.S. stock market is currently $40,511,838 million (December 31st, 2022). 

This week you could earn 5.1% on a six-month U.S. Treasury bill, free of state and local tax.

High-quality municipal bonds are yielding the equivalent of roughly 5.5% if you’re in the top federal tax bracket.  You could also buy TIPS (Treasury inflation-protected securities), maturing in 2043, that assure you of a return more than 1.6 percentage points above inflation if you hold for the next 20 years. Rising interest rates should help immunize you against Wall Street’s propaganda that says you need to own junkier bonds to bolster your income. Jason Zweig WSJ 24 February 2023

There is a single, inviolable truth about the housing market: property prices are inversely correlated to interest rates

When rates are low, mortgages are cheap and house prices rise. When they go up, debt becomes more expensive, demand collapses and the market is forced to adjust.  If that basic fact sometimes gets forgotten it’s because we have been living in the former state – a low interest rate environment – for over a generation and a half. Buyers and sellers are in a stand-off, with the former unprepared to commit until prices fall, and the latter unwilling to drop their prices. Today’s homeowners have such big mortgages that interest rates at 6 per cent would cause as much pain as those of 15 per cent did when the market crashed in 1989. It’s likely that we are currently living in the lag – a delay between Wile E Coyote running off the cliff and gravity starting to take effect. At the moment, many in the property industry are desperately pawing fresh air trying to convince themselves and everyone else that we haven’t run out of road or that the landing will be soft. Ben Wright Telegraph 25 Februa

A housing market we should be worrying about – the American one

 Home sales down for 12 straight months in a row, the weakest set of numbers for more than a decade.  Anyone who thinks that is purely an American matter is kidding themselves. If the US market crashes, it will tip the economy into recession, and that will ripple out across the world.  If there are losses on mortgages, it will threaten the stability of the financial markets. It will determine what the Federal Reserve will do with interest rates, affecting every country's economy. In 2008, the collapse of the subprime mortgage market triggered a global financial crisis.  What happens to house prices will make the difference between whether there is a hard or a soft landing. The Fed is trying to engineer by far the hardest trick in the central banking playbook; slowing the economy down, and bringing inflation back under control, but without triggering a full scale recession. It sounds straightforward enough, but it is very hard to achieve in practice. What happens to the housing mark

Ännu går mycket av vården och omsorgen till de små kullarna som föddes på 1930-talet,

 men allt fler fyrtiotalister passerar nu 80-årsgränsen, då behoven ökar på allvar.  Om kommuner och regioner nätt och jämnt får budgetarna att gå ihop i dag, hur ska det då bli när antalet åttioplussare blir ännu större under det närmaste årtiondet? Befolkningen åldras – det belastar vården och omsorgen, inte minst genom den kvarts miljon som kommer att lida av demenssjukdomar 2030.  Gunnar Wetterberg Expresen 26 februari 2023

S.O.S for the U.S. Electric Grid

PJM Interconnection, one of the nation’s largest grid operators.,sounds the latest alarm that fossil-fuel plants are shutting down without adequate replacement power.  The polit ical class yawns. WSJ  Editorial  Feb. 26, 2023 The electric grid is about to be transformed The electric grid is about to be transformed | The Economist Solar Dwarfs Coal on Wait List to Hook Up to US Power Grid - Bloomberg

Is the Fed really that committed to getting inflation back to 2%?

  Powell and his colleagues swear up and down that they are. And they insist they have no plans to increase their price target, despite calls from some economists to do so.  But Powell & Co. have also made clear that they’re willing to tolerate inflation above 2% for a while, especially if it’s heading down. They’re not out to crash the economy just to bring inflation back to their goal. Has the Fed ever accomplished a soft landing? Arguably once, in 1994-1995. Bloomberg 27 February 2023

Snitträntan på ett nytt bostadslån låg i januari på 3,56 procent.

 Den rörliga räntan (tremånadersräntan) var 3,54 procent, den högsta sedan augusti 2012, enligt SCB.

The second-longest series of weekly declines since May

While the reemergence of hotter-than-forecast inflation was the proximate cause of the latest plunge, another force is also at play in the second-longest series of weekly declines since May: high valuations.  One lens that takes account of the increasingly anemic growth expected in S&P 500 earnings shows equities as richly priced as they’ve been in almost three decades of data. The model, a tool of Fidelity Investments legend Peter Lynch a generation ago, is the PEG ratio, the market’s price-earnings multiple divided by its forecast growth rate.  Since peaking earlier this month, the S&P 500 has erased more than half of a year-to-date gain that at one point reached almost 10%. The Dow Jones Industrial Average has already wiped out its 2023 advance after falling four weeks in a row. Bloomberg 24 februari 2023 ------- Stock market books worst day of 2023 as ris

Achieving the 2% target is going to be somewhat painful.

  Whether the Fed keeps rates high for longer or spikes them quickly, pain is unavoidable   With 2% inflation, for example, prices are going to double every 35 years.    Of course, if the inflation target went up to 4%, prices would double over 17 ½ years, or four times in a lifetime.  It’s hard to understand how anyone could construe that as price stability. Achieving the 2% target is going to be somewhat painful. Robert Brusca MarketWatch 22 February 2023

Despite Tuesday’s disappointing home-sales numbers, some investors think the real-estate market is due for a turn.

Potential sellers have been held back by their reluctance to swap their current mortgages for new ones at higher rates, said Art Hogan, chief market strategist at B. Riley Wealth, adding that prospective buyers have been dissuaded by high prices. “We’re getting ready to break that logjam,” Mr. Hogan said, because the sellers are getting used to the “new normal” of mortgage rates over 6%, while prices have slipped enough to entice buyers, especially the many millennials who are now in their mid-30s, an age when many people start families and establish households. “I’m optimistic about the spring,” said Mr. Hogan. WSJ 21 February 2023 Last week, U.S. mortgage rates marked their fastest increase in four months, rising again to 6.32% after mostly falling since mid-November.  New data Tuesday showed existing-home sales fell in January for the 12th straight month. Matt Grossman WSJ 22 February 2023 https://www.

As the northern U.S. deals with a winter blast,

 record warmth is expected in the mid-Atlantic and Southeast  — 30 degrees to 40 degrees above normal in some places. Record highs are expected from Baltimore to New Orleans and in much of Florida, Pereira said. Washington, D.C., could hit 80 degrees (27 C) on Thursday, which would top the record of 78 degrees set in 1874. MarketWatch 22 February 2023

The reckoning has begun for continental Europe’s highly leveraged real estate companies

Then there’s Sweden’s property sector. It’s had to adjust as base rates have jumped to 3% from below zero in three years or so. Swedish firms have the highest loan-to-value ratios, a measure of debt relative to assets, of the Stoxx Europe 600 Real Estate index.  Gothenburg-based Castellum AB last week moved to raise 10 billion kronor ($970 million) in a jumbo share sale to bolster its finances, days after domestic peer Fabege AB cut its dividend. Chris Hughes Bloomberg 21 februari 2023 ”Det råder inga tvivel om att det finns viss osäkerhet kring hur fastighetsbolaget ska finansiera sig. ”

Där finns bland annat planer på gemensamma gränser, valuta och militär

- Det är som att höra Gunnar Hökmark och andra EU-kramare. - Men det handlar inte om EU. Det är Rysslands planer på att erörvra Vitrysslad (Belarus). - Jaha?

A four-month decline in mortgage yields may be over

February 17, rates are back up to 6.80 percent.  It is not likely many captured the bottom, but there was ample time to refinance around 3.0 percent.  Mish 20 February 2023

Upplands Väsby. En villa som för ett år sedan kostade 8 miljoner är idag värd 6,4.

Högbelånade kunder skulle förlora sitt bostadskapital om de sålde på dagens marknad.  –  Vissa har ju 85 procent belåning, och då är prisfallet på 20 procent inte roligt. Om de behöver bo någon annanstans, hyr de ut huset Marknaderna för bostadsrätter respektive villor just nu är väldigt olika. I Stockholms län har bostadsrätterna fallit med 9 procent på ett år, medan villorna har prisfall på 14 procent. Johan Hellekant SvD 21 februari 2023 Om två veckor blir den upplåst, bindningstiden på den största klumpen i vårt bostadslån Författaren Caroline Ringskog Ferrada-Noli beskrev nyligen detta tidstypiska uppvaknande för serieskaparen Liv Strömquist i deras gemensamma podcast ”En varg söker sin pod”.  Hon talade om ”ett glapp i tiden” där den medelklass hon själv tillhör fick leka överklass och hur det kunde förbrylla henne redan innan Putin och Riksbanken blåste av den stora klassutflykten. Hon förkunna

Vill du inte betala för mina principer så har jag andra

Hur många oklickade krönikor om klimatet har man råd att skriva innan det är dags att så att säga bli personlig? Bjuda på något? Möjligen finns det också ett större problem här än att kulturskribenter snöar in på sina privatliv för att betala hyran. I ett hårt samhällsklimat kan det mycket väl hända att vissa politiska åsikter visar sig lättare att överleva på än andra.  Detta är mina principer, och om ingen vill betala för dem kan vi nog lösa det. Det finns röster i offentligheten som för mindre än tio år sedan varnade skarpt för Sverigedemokraterna – och i dag ser samarbetet med fascister som en självklarhet.  Hur gick det till? Kanske kom de verkligen på andra tankar. Kanske gjorde de bara en prognos för var maten skulle finnas i framtiden. Risken finns tyvärr att det är ungefär samma sak. Kristina Lindquist DN 20  februari 2023

Private Equity’s lending safeguards deteriorated

Between about 2018 and 2021, I heard from a lot of debt investors who were unhappy about what they were being asked to swallow in the booming market for financing private-equity deals.  Ambitious lawyers — even more than sharp-toothed dealmakers — were driving the degradation of lending standards, providing less protection if a borrower went south. Many managers felt powerless to fight it: They needed to put money to work because sitting on cash pays nothing. As ultra-cheap money drove a manic hunt for yield, debt investors competing for a piece of new deals accepted ever-weaker safeguards in loan contracts. These are the covenants and secure claims to collateral that help lenders recover their money when overleveraged businesses get into trouble. Now is the time to start regretting this behavior.  It’s a classic agency problem: A conflict between, on the one hand, the ultimate investors in the funds or vehicles that buy the loans and, on the other, the managers of those funds and CLOs

Investors have pushed stocks into the death zone

Warns Morgan Stanley’s Mike Wilson  “Investors began to move faster and more energetically, talking more confidently about a soft landing for the U.S. economy. As they have reached even higher levels, there is now talk of a ‘no landing’ scenario – whatever that means. Such are the tricks the death zone plays on the mind – one starts to see and believe in things that don’t exist,” says Wilson. Back to Wilson, who says the P-to-E ratio is now 18.6, and equity risk premium at 155 basis points, meaning “we are in the thinest air of the entire liquidity-driven secular bull market that began back in 2009.”  He says the bear market rally that begin in October from reasonable prices has turned into a speculative frenzy based on a Fed pause/pivot that isnt coming. Steve Goldstein MarketWatch 20 February 2023

Martin Wolf “The Crisis of Democratic Capitalism” Årets viktigaste bok

Martin Wolf has long been one of the wisest voices on global economic issues. He has rarely been called an optimist, yet he has never been as worried as he is today. Liberal democracy is in recession, and authoritarianism is on the rise. The ties that ought to bind open markets to free and fair elections are threatened, even in democracy’s heartlands, the United States and England. Around the world, powerful voices argue that capitalism is better without democracy; others argue that democracy is better without capitalism.  This book is a forceful rejoinder to both views. Even as it offers a deep, lucid assessment of why this marriage has grown so strained, it makes clear why a divorce of capitalism from democracy would be a calamity for the world. They need each other even if they find it hard to life together. Speakers: Martin Wolf, Diane Coyle and Jesse Norman MP LSE London School of E

Federal Reserve officials like to call their decisions “data dependent.”

People claim to be data-driven, even when they aren’t. You can sincerely think you are data-driven while looking at data that’s incomplete, distorted, or just plain wrong. We live in a complex world. The kind of measurements that lead to good decisions aren’t easy even when everyone involved means well. Add in the fact that we’re all biased in different ways, and it all gets very complicated, very fast. Inflation is another common adjustment. You know about “real” interest rates. That’s simply the nominal interest rate minus the inflation rate. If your mortgage is 5% and inflation is 3%, the real rate is 2%. That adjustment, however, can vary depending on the inflation benchmark you use, of which there are many. Let’s walk down housing price history lane. John Mauldin 17 February 2023

Treasury Bill Rates at 5%

The rate on some US Treasury bills, considered the safest investment in the world and just as good as cash, rose above 5% this week, a level not seen since early 2007.  The question investors should be asking is, why only 5%? Break-even rates on Treasuries, which are taken as a measure of what traders expect the rate of inflation to be over the life of the securities. For 10-year notes, that rate is 2.31%.  It seems optimistic to expect that to be the average rate of inflation over the next decade, especially without further aggressive actions by the Fed and a recession. The 20 years from 1986 to 2006 were designated the “ Great Moderation.” It seemed that rapid economic growth was possible with central bankers keeping inflation firmly under control without actions that might cause deep or long-lasting recessions.  The subsequent financial crisis in which central banks seemed to have little power smashed that idea, as did following events such as the European sovereign debt crisis.  Th

Inflation will be harder to bring down than markets think

 Investors, who since the autumn have increasingly bet that inflation, the world economy’s biggest problem, will fall away without much fuss.  The result, many think, will be cuts in interest rates towards the end of 2023, which will help the world’s major economies—and most importantly America—avoid a recession. Investors are pricing stocks for a Goldilocks economy in which companies’ profits grow healthily while the cost of capital falls. The Economist 16 February 2023 Goldilocks Economy Is a Fairy Tale Too Good to Be True James Mackintosh WSJ 8 February 2023 ”En bred desinflationsprocess har inte ens börjat”  sade  Isabel Schnabel, ledamot i ECB:s direktion DI 17 februari 2023 Bad news for the ‘pessimistic bulls.’ Here ar

Biggles löser finanskrisen

När man ställs inför livets svåra frågor bör man ställa sig frågan: Vad hade Biggles gjort? Så även inom nationalekonomin. De flesta Biggles-böcker börjar ungefär så här: Flygbåtens motorer brummade entonigt och Biggles lät blicken glida över instrumentbrädan. Han kollade inte bara  kompassen utan även höjdmätaren.  Annars kunde det gå illa. Därutöver kollade han även bensinmätaren, detta eftersom det, även om både riktning och höjd varit rätt, hade gått riktigt illa om bensinen tagit slut. Självklart? Javisst, men många av våra vanligaste ekonomer och politiker förefaller bara kunna ha en tanke i huvudet åt gången. - Växelkursen skall vara fast. - Inflationen skall vara två procent. - Budgeten skall visa överskott. Det har inte gått så bra. Låt oss nu bli lite mer komplicerade, om än fortfarande på ett enkelt sätt. Detaljerna kan säkert Klas Eklund och de duktiga tjänstemännen på finansdepartementet och Konjunkturinstitutet räkna ut.                              Statsbudgeten Överskot

Can a central bank make $2.5trn of cash vanish without anyone much noticing?

QT is as QE in reverse.  Just as QE involves creating central-bank reserves to buy bonds, so QT involves removing reserves as the central bank pares back its holdings.  Initially qt drains money from a commercial-banking system that is awash in liquidity; as it continues, however, liquidity gets steadily tighter, and funding costs for banks may soar without much warning. Some banks, having recently lost deposits, have turned to the federal-funds market to borrow reserves from other lenders in order to meet regulatory requirements. Daily borrowing in the fed-funds market in January averaged $106bn, the most in data going back to 2016. The Economist  9 Fabruary 2023

Consumers Spending hasn’t hit trends like this since before Lehman imploded

This is despite fears from Wall Street pundits that cash in the system is waning as money doled out for the two-year pandemic stimulus dries up. Consumers’ appetite to keep buying may bolster the Federal Reserve’s resolve to maintain its aggressive monetary tightening campaign. After the lockdown’s lurch downward, American retail sales are back roughly where they might have been expected to be by now when Lehman fell. The pandemic stimulus went into people’s wallets, and even though money supply growth has actually been negative over the last 12 months, much of it still hasn’t been spent John Authers Bloomberg 16 februari 2023

How Much Is Inflation Slowing Down, Really?

The main indexes attempt to capture a realistic picture of the overall cost of living, but there’s plenty of room for argument over how different goods and services are weighted, and the way a few big outliers can distort the biggerpicture.  Statisticians, therefore, tend to be more interested in measures such as the trimmed mean (in which the biggest outliers in either direction are stripped out and an average taken of the rest) and the median.  The Federal Reserve Bank of Cleveland produces calculations for both, and they tell a disquieting story.  John Authers Bloomberg 15 februari 2023

Aktieveteranen Peter Malmqvist medger att han (liksom jag) hade helt fel om börsen i höstas

Men nu är han ännu mer pessimistisk. Fartblinda investerare har drivit upp börsen på fel grunder, vilket bäddar för nya kraftiga ras.  ”Då riskerar det att utlösa rädsla och panik” DI 15 februari 2023

USA CPI January 2023


Om läkekonst förr och nu

I över tvåtusen år trodde man att sjukdomar orsakades av obalans i våra kroppsvätskor.  Sedan antikens dagar har därför i stort sett all behandling mot sjukdomar syftat till att försöka återställa en god balans mellan våra kroppsvätskor. Detta har skett genom åderlåtning (att tappa blod ur kroppen), eller genom att patienten gavs laxermedel, kräkmedel eller andra lika meningslösa medikamenter. I boken Om läkekonst förr och nu gör författaren en gedigen genomgång av den läkekonst som ofta gjort mer skada än nytta och ända fram till 1900-talets början förpassade otaliga sjuka till en för tidig död.  Självkritik i läkarkåren var ovanligt, däremot ifrågasatte många filosofer och författare läkekonsten.  Kenneth Pehrsson lyfter fram pionjärerna inom vaccination och mikrobiologisk verksamhet under 1800-talets senare hälft: Mänsklighetens och läkekonstens riktigt stora hjältar! Han beskriver också den medicinska guldåldern från 1935 till 1980, med en explosionsartad utveckling av effektiva lä

Americans, in the midst of a loneliness epidemic, are not having enough sex

 Across almost every demographic group, American adults old and young, single and coupled, rich and poor are having less sex than they have had at any point in at least the past three decades. Sex isn’t the sole form of fulfilling human interaction and certainly isn’t a salve for loneliness in all forms. Still, it should be seen as a critical part of our social well-being, not an indulgence or an afterthought.  This is in large part because the rise in loneliness closely parallels a decline in sex. More than a quarter of Americans hadn’t had sex even once in the past year the last time the General Social Survey asked, in 2021. It was the highest such level of sexlessness in the survey’s history. In 21st-century America, loneliness is essentially omnipresent, and the high schooler’s cliché fear that “everyone else is having sex” has never been less true. Magdalene J. Taylor New York Times 13 February 2023

Svensk ekonomi går sämst i EU

 Sveriges ekonomi går sämst av alla 27 medlemsländer i unionen, enligt EU-kommissionens senaste prognos. I år väntas rentav bruttonationalprodukten krympa med 0,8 procent. SvT 13 februari 2023  I Sverige tror många fortfarande att man sparar i ladorna när ekonomin går på lägre varv än nödvändigt eftersom det ger lägre statsskuld. Henrik Mitelman, Dagens Industri 21/9 2020: ”Att den svenska staten har möjlighet att bedriva en så expansiv finanspolitik i detta läge är fantastiskt. För det ska vi tacka Anders Borg och Magdalena Andersson som har hållit hårt i slantarna under de goda åren.” Aftonbladet 22/9 2020: ”Magdalena Andersson fick rätt. De stora satsningarna är möjliga för att vi har sparat i ladorna under de goda åren.”  Sparat i ladorna? Hm. Var exakt står dessa lador? Och vad innehåller dom? Jo, jag förstår att det är bildlikt menat. Men det är ändå vilseledande och fel. Produktionen kan användas för konsumtion eller i

US stocks are ripe for a selloff ...

... after prematurely pricing in a pause in Federal Reserve rate hikes, according to Morgan Stanley strategists. “While the recent move higher in front-end rates is supportive of the notion that the Fed may remain restrictive for longer than appreciated, the equity market is refusing to accept this reality,” a team led by Michael Wilson wrote in a note.  Wilson — a staunch Wall Street bear who correctly predicted last year’s selloff when US equities posted their worst performance since 2008  — expects deteriorating fundamentals, along with Fed hikes that are coming at the same time as an earnings recession, to drive equities to an ultimate low this spring.  “Price is about as disconnected from reality as it’s been during this bear market,” the strategists said. Bloomberg 13 February 2023

Något har gått snett i den svenska synen på Andra Världskriget

Synen på den svenska samlingsregeringens agerande mot Nazityskland har de senaste decennierna blivit negativ. Neutraliteten avfärdas som en myt, det påstås att Sverige lade sig platt för Tyskland och blev ett lydrike.  I skolundervisningen får elever lära sig uppfattningen att Sverige befolkades av nazister och rasbiologer.  Detta ensidiga fördömande och denna moraliserande hållning är i behov av en korrigering. Historia kan skrivas utifrån ett då eller ett nu. Alf W. Johansson | Respons 1/2014

Hur Sverige under 1900-talet formades till världens mest sekulärindividualistiska land

Landet som glömde Gud.  Ingen av dem som talar väl om starka och självständiga medborgare, från Myrdal till Palme, säger ett ord om medborgarnas rätt att vara olika. När det gäller skolan önskar Myrdal att lärarna ska ge varje elev individuell undervisning, men ”med detta avses givetvis inte en individualisering som innebär, att elever med olika bakgrund och skiftande förutsättningar får gå igenom kursen så snabbt de hinner och orkar”. När jag läste ”Mao i Sverige”, Ingrid Wållgrens bok om sjuttiotalsvänstern (2017), slog det mig att rörelsen hade mer gemensamt med frikyrkor än med politik. Håkan Lindgren SvD 13 februari 2023 RESPONSPODDEN: MAOISMEN I SVERIGE Kay Glans Senior editor och styrelseordförande

General Sir Richard Barrons

  Battles for territory are still dominated by the artillery that brings death and destruction within ranges of about 30km. The use of satellite imagery to see and locate enemy positions from space. Thanks to the data provided from both expensive, capable geo-stationary military satellites and cheap, commercial low-Earth-orbit satellites and drones. It is no longer possible to move many members of an army, navy or air force undetected.  The Russian invasion was monitored in minute detail for some months before it started and has been ever since. Access to the internet (as provided by Elon Musk’s Starlink in Ukraine) General Sir Richard Barrons  The Economist By Invitation February 11th 2023 General Sir Richard Barrons is a British Army officer. He is the co-chairman of Universal Defence and Security Solutions, a global defence consultancy. https://www.universal-defence.

So what will the Fed do?

 By tightening monetary policy, Chair Jerome Powell wants to restrain demand for labor just enough — but not too much — to bring wage growth down to the 3%-to-4% level consistent with the central bank’s 2% inflation target.  To that end, the best approach would be to hold interest rates at a moderately restrictive setting for a significant period of time. Given that rate hikes affect the economy with long and variable lags, this reduces the risk of going too far and increases the chances of a soft landing. The Fed can take its time as long as inflation expectations remain well-anchored.  But here’s the rub: It’s hard to know what a moderately restrictive rate would be. Economists can’t even agree on the threshold — the “neutral” rate that neither stokes nor cools the economy. Before the 2008 financial crisis, they guessed that it was about 2%, adjusted for inflation (or about 4% in non-adjusted terms). Now, the median estimate among Fed policymakers is 0.5% (or a nominal 2.5%, assuming