“What’s Driving the Neutral Real Rate?" After years of near zero short-term interest rates—and real (inflation-adjusted) interest rates substantially below zero--, the Federal Reserve has begun to slowly raise the federal funds policy rate. Financial markets expect the Fed to continue raising the fed funds rate over the next few years, slowly erasing the accommodative monetary policy that has been in place since the financial crisis. At what point does the Fed Funds rate hit a “neutral” level, where it is no longer stimulating or slowing economic growth? On May 22, Federal Reserve economist Bill Emmons will discuss the concept the neutral rate of interest, also called “r-star”. He will explain the methods used by economists to estimate r-star. He’ll also express his views on how future monetary policy actions could impact banks, consumers and the broader economy.