SF Fed's Parry sees US rates 'maybe' at 3.5%

Federal Reserve Bank of San Francisco President Robert Parry said in an interview that U.S. interest rates cannot remain at their 1958 lows forever and will have to rise at some point, perhaps to 3.5 per cent.

In an interview carried by the San Francisco Chronicle on Sunday, Parry said the Fed funds rate could not remain at 1.0 per cent indefinitely.

"Let's assume inflation averages 1 to 2 percent. Then you could see maybe the natural funds rate would be -- I don't know -- 3.5 per cent, someth