3 See Lael Brainard (2016), “The ‘New Normal’ and What It Means for Monetary Policy,” speech delivered at the Chicago Council on Global Affairs, Chicago, September 12, https://www.federalreserve.gov/newsevents/speech/brainard20160912a.htm. -3mean when they say the Phillips curve is very flat: The historical relationship between resource slack and price inflation appears to have broken down.
4 Although wage growth has been moving progressively higher as labor market slack has diminished, broader price inflation has remained muted. Another important feature of today’s new normal is that the long-run neutral interest rate seems to be lower than it was historically.