BETTER LATE THAN NEVER:

A top Federal Reserve policymaker on Thursday dropped his promise to advocate for a U.S. interest-rate hike soon, and suggested that current near-zero rates may not be stimulating the economy as much as thought. [...]

[Dallas Federal Reserve Bank President Robert Kaplan] used much of his speech to recap a growing body of research that suggests the Fed has less room than in the past to raise rates without putting unwanted brakes to the U.S. economic engine.

Evidence is growing that the so-called neutral rate has declined sharply. Fresh forecasts released last week show Fed officials now believe that a healthy U.S. economy can maintain full employment and stable prices with a policy rate of only 3 percent, well below the 4.25 percent rate they saw just four years ago.

"I am strongly persuaded by arguments that aging demographics in advanced economies, a decline in productivity growth and the continued emergence of the U.S. as a source of safe assets have all contributed to the decline in the neutral rate," he said.

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