The prospect of the Federal Reserve once again setting its short-term interest rate target at near zero levels at some point in coming years remains real despite current relatively high levels of short-term borrowing costs,

New research from the Federal Reserve Banks of New York and San Francisco says markets put the odds of zero interest rates lower today than in the recent past, but economic uncertainty raises the potential for drastic cuts in the "medium to long term.

New research from the Federal Reserve Banks of New York and San Francisco finds there is nearly a one-in-ten chance that interest rates will return to zero over the next seven years.