Fed Study Warns: Economic Outlook Uncertain or Zero Interest Rate Risk Could Reoccur

On July 8th, a recent research report jointly released by the New York Fed and the San Francisco Fed indicated that although the current short-term borrowing costs are relatively high, the likelihood of the Fed's short-term interest rate target approaching zero again in the next few years still exists. This report, which was co-authored by the President of the New York Fed, Williams, shows that the medium- to long-term risk of the Fed's interest rate target returning to ultra-low levels is "currently at the lower end of the observed range over the past fifteen years." However, the researchers further added that due to the recent increase in uncertainty, the possibility of returning to near-zero interest rates in the medium to long term is "still substantial." (FXStreet)