Federal Reserve Daly believes that before monetary policy returns to neutrality, the Federal Reserve will still cut interest rates a few times. Speaking about the federal funds rate, Daley said, “The truth is that we are still a long way from what we can achieve.” She added that the nominal neutral interest rate is likely to rise before the outbreak of the pandemic, but the exact level is difficult to predict accurately. She said 3% is probably a good guess.

Federal Reserve Daly believes that before monetary policy returns to neutrality, the Federal Reserve will still cut interest rates a few times. Speaking about the federal funds rate, Daley said, “The truth is that we are still a long way from what we can achieve.” She added that the nominal neutral interest rate is likely to rise before the outbreak of the pandemic, but the exact level is difficult to predict accurately. She said 3% is probably a good guess.