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What do we mean by neutral and what role does it play in monetary policy?

Type
Speech
Subtype
Central banker's speech
Date delivered
13 September 2018
Country
United States
Speech by Ms Lael Brainard, Member of the Board of Governors of the Federal Reserve System, at the Detroit Economic Club, Detroit, Michigan, 12 September 2018.

It is a pleasure to be in Detroit. I started my career working here in the Motor City, and I have followed the fortunes of this area with interest ever since. A few years ago, I visited some of Detroit’s neighborhoods with our local officials at a time when damage from the crisis was still pervasive. While challenges remain in many of the city’s neighborhoods, since that time the metropolitan area overall has seen signs of a rebound in business activity and investment, and the unemployment rate has continued to trend downward, recently falling to 4.3 percent.