Neel Kashkari president of the Federal Reserve Bank of Minneapolis The neutral rate might be at least temporarily elevated

The FOMC has undeniably tightened policy meaningfully, both relative to the pre-pandemic period and to some prior tightening cycles. 

Nonetheless, it is hard for me to explain the robust economic activity that has persisted during this cycle. 

My colleagues and I are of course very happy that the labor market has proven resilient, but, with inflation in the most recent quarter moving sideways, it raises questions about how restrictive policy really is.

If policymakers and market participants are misperceiving the neutral policy rate, that could explain the constellation of data we are observing.

 This is also a communication challenge for policymakers. 

In my own Summary of Economic Projections (SEP) submission, I have only modestly increased my longer-run nominal neutral funds rate level from 2 percent to 2.5 percent. 

The SEP does not provide a simple way to communicate the possibility that the neutral rate might be at least temporarily elevated.

Neel Kashkari 7 May 2024

https://www.minneapolisfed.org/article/2024/policy-has-tightened-a-lot-how-tight-is-it-an-update

Neel Kashkari took office as president and CEO of the Federal Reserve Bank of Minneapolis on January 1, 2016, 

In this role, he serves as a member on the Federal Open Market Committee