WORKING HARD OR HARDLY WORKING?

Abstract

Executive Summary Robust job growth amidst weak GDP growth may not make sense, but it has been the reality the past few years. The mismatch has already changed the way the Fed sees the world in terms of potential growth and the appropriate fed funds rate for the longer term. In this special report, we discuss how this dynamic will remain a key issue for interest rates and monetary policy and we identify what to watch to gain a better understanding of implications for both.