Watch out for R*!
By Tiffany Wang, WOO Network Analyst
The sentiment emanating from the annual Jackson Hole Symposium remains relatively balanced. Among the various topics, R* has captured investors’ primary attention.
What’s R*, and why is it important?
R* is the real neutral rate of interest that equilibrates the economy in the long run. It is the real interest rate, that is neither expansionary nor contractionary when the economy is at full employment. Consequently, comprehending and approximating R* holds paramount significance in the crafting of monetary policy. As discussed in previous weeks, investors anticipate an upward adjustment in the neutral interest rate.
Fed noted that if the pre-pandemic consensus R* was “relatively low with a wide uncertainty band,” it is now “relatively low with a huge uncertainty band.” Given that R* is a theoretical construct, precise determination proves elusive, and well-regarded models yield divergent estimations. Investors’ perspective tends to converge around the notion that the rate will likely remain elevated for a prolonged period.
Crypto and blockchain events this week (Aug 28th ~ Sep 1st)
Meanwhile, here are the biggest crypto and blockchain events happening around the world this week so that you can stay informed.
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