In the latest FOMC SEP median path, by the end of next year, the federal funds rate is projected to rise to a level that exceeds the longer-run federal funds rate during a  8  A variety of hypotheses have been advanced to explain this decline, including slower labor force growth, slower productivity growth, and an increase in savings propensities.
With market risk - the “easy” one - the Federal Reserve and other regulators built on industry practices for measuring a bank’s “value at risk” when implementing a new regulatory capital standard for the banking system last year. Basing capital requirements on a bank’s internal calculations of its largest expected daily trading loss at a 99% confidence level was an important step, we thought.