The New York and San Francisco Federal Reserves indicate that despite high borrowing costs, a return to near-zero rates remains possible due to rising uncertainties.
A joint report by the New York and San Francisco Federal Reserves suggests that while current short-term borrowing costs are high, there remains a significant possibility of the Fed's short-term rate target approaching zero in the coming years. The report, contributed to by New York Fed President John Williams, indicates that the risk of rates returning to ultra-low levels is at the low end of the range observed over the past fifteen years. However, researchers caution that recent uncertainties have increased the likelihood of a return to near-zero rates in the medium to long term.