Bloomberg Surveillance · Wednesday, July 29, 2026
The discussion following the Fed's decision turned to the concept of neutral interest rates, with experts suggesting that the previous era of near-zero rates is over. They argue that global competition for capital and increased government spending necessitate higher neutral rates, potentially in the 3-5% range for the Fed.
“You're not going back to zero to two percent rates.”
“It means probably neutral rates for the FED are around three to five percent, and you're looking at a ten year treasury that who knows could be four to six percent.”
“I think we're actually lower than the neutral rate right now, and I think many on the FED believe that we're lower than the neutral rate, or at least at the neutral rate, which is not where we should be if inflation is at this level.”