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The estimates of the neutral rate are exceptionally uncertain, forecasts for inflation are exceptionally uncertain, and my feeling is that people have anchored themselves to what has transpired since 2008 as to what 'usual' interest rates are. In the 2010s many people spoke about how the Fed was 'pushing on a string' in that they struggled to increase inflation via more and more extreme monetary stimulation. Which makes sense, their policies mostly juiced up financial assets which are owned by the rich so their easing did not create that much inflation since the rich will not change their consumption patterns that much if assets appreciate. It is completely reasonable that we are in the reverse situation today, where in order to generate even a modest reduction in inflation the Fed needs to move interest rates an outsized amount. As of today, stocks, real estate, crypto, etc. are well above their pre-COVID highs. Therefore the vast majority of people are still feeling pretty rich. My sense is the Fed needs asset prices decently lower from here (via QT/interest rate increases) to generate a response from the real economy.