My latest at Bloomberg is now up. We have been building up to this since Powell took the stage at Jackson Hole:

The Federal Reserve’s “r-star” has gone full supernova. New York Federal Reserve President John Williams, its key proponent, made clear in a speech late Friday that the neutral interest rate is no longer a guiding star for monetary policy. This means a federal funds rate in the range of what is considered neutral has no special significance as far as policy is concerned.

That is hawkish relative to any expectations that the Fed would pause as policy rates approach a level that neither stimulates nor restricts the economy. And it again highlights the importance of the incoming economic data. The Fed isn’t holding your hand anymore…

Continued at Bloomberg Opinion.