Federal Reserve Research Report Warns: Uncertain Economic Outlook May Bring Back Zero Interest Rate Risk

Odaily Planet Daily News: A new joint research report released by the New York Fed and the San Francisco Fed points out that although current short-term borrowing costs remain relatively high, there is still a possibility that the Federal Reserve’s short-term interest rate target could approach zero again in the coming years. The report, co-authored by New York Fed President Williams, indicates that the medium- to long-term risk of the Fed’s rate target returning to ultra-low levels is “currently at the lower end of the range observed over the past fifteen years.” However, the researchers add that due to rising uncertainty in the near term, the likelihood of returning to near-zero rates in the medium to long term “remains significant.” (Jin10)