Why has the neutral real interest rate risen?

As we know, the concept of a neutral real interest rate needs to be handled with care, since it does not take into account the need to finance a shortfall in savings relative to investment through external borrowing. That said, the concept of a neutral real interest rate, as used by central banks, gives an indication of the future direction of monetary policy. The Federal Reserve recently indicated that the US neutral real interest rate had probably risen. If the neutral real interest rate rises, it is because the equilibrium of savings and investment, in a situation where inflation is equal to the central bank’s inflation target, implies a higher real interest rate than in the past. This situation occurs if: Demand for goods and services is structurally stronger than before; The supply of goods and services is structurally weaker than before; The labour market is structurally tighter than before. We believe that due to the decline in net corporate investment and, in the United States, the fall in the household savings rate and, in the euro zone, the decline in productivity, the neutral real interest rate has actually risen in both countries/regions.