John C Williams: Measuring the natural rate of interest - past, present, and future

Remarks by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Thomas Laubach Research Conference, organised by the Board of Governors of the Federal Reserve System, Washington DC, 19 May 2023.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
22 May 2023

As prepared for delivery

Thank you, Trevor. And good morning, everyone. It is a special privilege to participate in this conference honoring my dear friend, colleague, and co-author, Thomas Laubach.

Many of you knew Thomas personally, and all of you knew him through his work. He was a brilliant economist, trusted colleague, and an inspiring leader. We miss Thomas' dedication, good cheer, and sense of humor, and his impact on everyone he touched endures.

Our collaboration started in the fall of 2000 with a shared interest in figuring out how to measure the elusive natural rate of interest, otherwise known as r-star. At the time, neither of us had any idea that our research on this topic would continue for 20 years.

Kathryn Holston and I are carrying on this work. It's one of the many ways we can honor Thomas and his memory. Because of the unprecedented, pandemic-related shocks to the economy, we paused our regular publication of r-star estimates in late 2020. This conference is the perfect venue to announce that we are resuming them. But first, I want to take some time to share r-star's origin story, which is how I came to know Thomas.

Before I go any further, I need to give the standard Fed disclaimer that the views I express today are mine alone and do not necessarily reflect those of the Federal Open Market Committee (FOMC) or others in the Federal Reserve System.