Over the longer run, the challenge under an interest-rate regime is to align the real federal funds rate with its new equilibrium value, which is likely to increase with a higher trend rate of productivity growth (due to a higher return on capital that underlies the new equilibrium real interest rate in the economy).
*  *  *  Energy and food prices and financial turmoil Today, the economies of both developed and developing nations are faced with high energy and food prices and financial distress, which are severely testing their resilience. Steady leadership, high-quality analysis, and bold answers are needed to overcome the many new challenges that now confront the development process.