Fed’s Daly Brings Higher Neutral Interest Rate Fears Back Into Mix for Bond Traders
- R-star is another term traders use for neutral interest rate
- Last mile of solving inflation will be hardest: Jamieson Coote
Mary Daly
Photographer: Bess Adler/BloombergThis article is for subscribers only.
Bond bulls may have just had a fresh speed bump placed in front of them by Federal Reserve Bank of San Francisco President Mary Daly.
Daly said the neutral interest rate — also known as R-star — may be higher now than it was before the pandemic, adding to the groundswell of concern the central bank’s benchmark will stay higher for longer. Her comments also seem at odds with traders betting the Fed will cut rates as many as three times next year.