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The Price of Money: A Guide to the Past, Present, and Future of the Natural Rate of Interest
An accessible guide to the natural rate of interest, why it is likely going up, and what that means for the future of the global economy and markets.
Ask most people who sets interest rates, and they'll say it's the central bank. At a fundamental level, though, decisions by the Federal Reserve, European Central Bank, and their peers around the world are constrained by the natural rate of interest. The natural rate - the interest rate that balances supply of saving and demand for investment, whilst keeping inflation low and employment high - has moved from academic obscurity to a central role in monetary policy, and the operation of the economy and financial markets.
For almost half a century from the 1970s to the 2010s, the natural rate in the US and other advanced economies fell. In the last decade, it has started to rise. In the years ahead, the cost of borrowing has further to climb. That shift from falling to rising borrowing costs reflects seismic shifts in demographics, technology, and geopolitics. In the years ahead, risk factors from war to artificial intelligence and climate change could accelerate its rise. For everyone from Ministers of Finance balancing the books to Wall Street titans making the next big bet, the shift from falling to rising borrowing costs has profound consequences. In a world where money is more expensive, the cost of managing it poorly gets higher.
In The Price of Money, the Bloomberg Economics team explain the evolution of the natural rate, the forces driving it, where it is headed, and what that means for everything from government debt to saving for retirement.
Ask most people who sets interest rates, and they'll say it's the central bank. At a fundamental level, though, decisions by the Federal Reserve, European Central Bank, and their peers around the world are constrained by the natural rate of interest. The natural rate - the interest rate that balances supply of saving and demand for investment, whilst keeping inflation low and employment high - has moved from academic obscurity to a central role in monetary policy, and the operation of the economy and financial markets.
For almost half a century from the 1970s to the 2010s, the natural rate in the US and other advanced economies fell. In the last decade, it has started to rise. In the years ahead, the cost of borrowing has further to climb. That shift from falling to rising borrowing costs reflects seismic shifts in demographics, technology, and geopolitics. In the years ahead, risk factors from war to artificial intelligence and climate change could accelerate its rise. For everyone from Ministers of Finance balancing the books to Wall Street titans making the next big bet, the shift from falling to rising borrowing costs has profound consequences. In a world where money is more expensive, the cost of managing it poorly gets higher.
In The Price of Money, the Bloomberg Economics team explain the evolution of the natural rate, the forces driving it, where it is headed, and what that means for everything from government debt to saving for retirement.
- GenresFinance
216 pages, Hardcover
Published August 8, 2025
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December 7, 2025The book is short, but the overall message is spelled out in the first chapter.
TLDR authors think that the interest rate will go up in the coming decades.
The climate change chapter detracts from the book and makes it sound less persuasive than it could have otherwise been.
TLDR authors think that the interest rate will go up in the coming decades.
The climate change chapter detracts from the book and makes it sound less persuasive than it could have otherwise been.
January 22, 2026
Solid book. A slower read than the cover and size would imply, but certainly a valuable thought experiment. A bit repetitive but well reasoned and researched. I feel like governments should really get control over their borrowing.
September 18, 2025
Quite technical and a bit dry but still full of useful insight, including the historical view in the opening chapters.
Displaying 1 - 3 of 3 reviews