Lower productivity and demographic growth are preventing the US economy from expanding faster and producing higher inflation, as well as holding down short- and long-term interest rates, John Williams said at a conference on October 5.

“In the new world of moderate economic growth, we all need to plan for relatively low rates for the foreseeable future,” said Williams. “I view a gradual pace of increases over the next two years, bringing the federal funds rate to its new normal of 2.5%, to be