Pilot Macro Advisors

Based on the information gathered, I can identify several structural factors that could potentially push the neutral interest rate higher in the US economy. These factors include:

1. Low Unemployment Rate: As the unemployment rate decreases, there is less slack in the labor market, which can lead to upward pressure on wages and inflation. This can, in turn, push the neutral interest rate higher. In the regression results, the coefficient for the unemployment rate is positive, indicating a positive relationship between the two.

2. Productivity Growth: Productivity growth is a key driver of economic growth and inflation. If productivity growth is strong, it can lead to higher wages and inflation, which can push the neutral interest rate higher. The regression results show a positive coefficient for productivity growth.

3. Gross Domestic Product (GDP) Growth: GDP growth is another important factor that can influence the neutral interest rate. Strong GDP growth can lead to higher inflationary pressures, which can push the neutral interest rate higher. The regression results indicate a positive relationship between GDP growth and the neutral interest rate.

4. Inflation: Inflation is the rate at which the general level of prices for goods and services is rising. If inflation is high, it can lead to upward pressure on interest rates as the Federal Reserve tries to keep inflation in check. The regression results show a positive relationship between inflation and the neutral interest rate.

5. Leading Economic Indicators: Leading economic indicators are a set of economic variables that can provide an early indication of future economic conditions. If these indicators are strong, it can signal that the economy is growing strongly, which can lead to higher inflationary pressures and a higher neutral interest rate. The regression results indicate a positive relationship between leading economic indicators and the neutral interest rate.

Based on this analysis, I recommend focusing on these structural factors when considering what could move the neutral interest rate higher in the US economy.