The free and open legal association of banking and commerce would be a profound and surely irreversible structural change in the American economy. Hence, we must be careful to assure ourselves that whatever changes are made in our supervisory structure, that it not distort our evolution to the most efficient financial structure as we move into the next century.
By more normal we mean within the range we consider for a neutral rate of interest that neither stimulates nor weighs on the economy. We estimate this rate to be between 2% and 3%. Two weeks ago, we raised the policy rate to 1%, still well below neutral. This is also below the pre-pandemic policy rate of 1.75%.