With the release of the minutes of the Federal Reserve’s September meeting, it’s clear that most policymakers expect to raise rates again. The minutes stated, “With regard to the outlook for monetary policy beyond the current meeting, most participants assessed that another increase in the target range for the federal funds rate would likely be appropriate by year end.” This largely aligns with the projections policymakers released at the September meeting. However, the minutes reinforce that position.

A Higher Neutral Rate Comes Into Focus

Importantly, the minutes noted that, “A couple of participants remarked on having increased their estimate of the neutral federal funds rate and thus their view of the appropriate setting of the target range for the federal funds rate. Several........

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