Economic Letter

The Asymmetric Costs of Misperceiving R-star

The natural rate of interest, or r-star, is used to evaluate the tightness of monetary policy, but this benchmark rate can only be estimated. Policymakers’ misperceptions of r-star can carry substantial costs for unemployment and inflation. A scenario shows that the costs are greater for overestimating r-star than for underestimating it if the federal funds rate is limited by the effective lower bound.

Strengthening Child Care in the Face of COVID-19

Before the COVID-19 pandemic, the child care industry was undervalued. Now, child care centers are in danger of being closed for good. What can we do to support the child care market, which is essential for parents' to participate in the workforce?

Work for the Fed

We like to say we work for the Fed, not at the Fed. That's because the SF Fed is not just another employer or government agency. Here, you have the opportunity to become part of an important public service institution whose work touches lives across the globe.