The Fed Funds cutting cycle initiated in September 2024 sits within the post-disinflation normalization phase. As of May 2026, three readings coexist on the current 4.25-4.50% level — none of them decisive. TL;DR Since September 2024 the Fed cut 100…
r-star, the real natural rate of equilibrium, is the hidden central parameter of Fed monetary policy analysis. Its value — unobservable — determines whether the nominal Fed Funds is modestly restrictive or already neutral. TL;DR At 3.50–3.75% Fed Funds, held…
Over 72 years of FEDFUNDS data, the Federal Reserve has run roughly a dozen complete cycles. Rather than a linear chronology, four canonical categories structure the analytical reading of the major phases. TL;DR Classified by type, the 2024-2026 cutting cycle…
The Taylor Rule, formulated in 1993 by John Taylor, is not a mechanical monetary policy recipe: it is a normative reaction function expressing what the nominal Fed Funds rate would be if the Fed minimized a quadratic loss function. TL;DR…
When the FOMC announces a target range, it does not directly steer the effective Federal Funds Rate: it sets two administered rates — IORB and ON RRP — that bound a corridor within which the market settles. TL;DR Two stress…
The FEDFUNDS effective rate published daily by the New York Fed is not an FOMC decision: it is a market price, computed on the overnight uncollateralized interbank transactions executed the prior business day in the United States. TL;DR Fed Funds…
The effective Federal Funds Rate is neither the FOMC’s announced target nor an arithmetic mean: it is the realized price of the U.S. overnight interbank market and the Fed’s central monetary instrument since 1954. TL;DR FEDFUNDS is the realized price…
Since late 2023, WTI has traded in a narrow $70-85 corridor with realized volatility compressed to levels unprecedented outside crisis. Three structural readings coexist: slowed Chinese demand, U.S. shale as swing producer, U.S. SPR at only 50% capacity. TL;DR A…
When WTI rises 30%, how much CPI inflation results? Estimated pass-through transmits 0.2 to 0.4 of the shock to headline CPI over six months, weaker on core, with intensity varying by macro regime — pre-GFC, post-GFC, post-COVID. TL;DR Eco3min calculations…
The oil burden measures oil’s weight in the economy: WTI price × national consumption / nominal GDP. Formalized by James Hamilton from 1983 onwards, the metric indicates that above 4-5% of GDP, three transmission channels produce a cumulative dynamic that…
