Central Banks

Fed’s Daly Says Neutral Interest Rate Could Be Higher Than Pre-Pandemic

Rise in bond yields may substitute for a rate hike, Daly says
San Francisco Fed chief speaks at town hall event in Chicago

WATCH: Federal Reserve Bank of San Francisco President Mary Daly said the neutral interest rate could be higher now than before the pandemic, though rates will not stay as high. Source: Bloomberg

Provide news feedback or report an error

Confidential tip?

Send a tip to our reporters

Site feedback:

Take our Survey

By Laura Curtis

October 10, 2023 at 11:04 PM UTC

This article is for subscribers only.

Federal Reserve Bank of San Francisco President Mary Daly said the neutral interest rate could be higher now than before the pandemic, though rates would not stay as high as they are now indefinitely.

“5% is not going to be the new neutral. There’s no evidence that that will be the new neutral — that’s still the policy rate trying to fight back high inflation,” Daly said Tuesday at a town hall event in Chicago, coordinated by the Chicago Council on Global Affairs.