Indeed, several factors suggest that the appropriate path to return monetary policy to a neutral stance could turn out to be quite shallow and gradual in the medium term. In particular, it appears likely that the medium-term neutral rate, or the real federal funds rate consistent with the economy remaining at full employment and 2 percent inflation, may be quite low.
Before going further, I should say that the views I will express today are my own and not necessarily those of other members of the Board of Governors or its staff.2  Costs, benefits, and policy options But even prevention has costs that must be weighed along with its benefits.