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http://www.epicoalition.org/docs/the_natural_rate.htm
CONCLUSION
Under a state currency system with floating exchange rates, the natural, nominal, risk free rate of interest is zero. As many other key rates of interest in the economy continue to follow the fed funds rate very closely, this will serve as the base rate in the economy, with markets determining the credit spreads through risk assessment. Furthermore, there are a number of reasons why allowing the rate of interest to settle at its natural rate of zero makes good economic sense. The conventional wisdom of a fixed exchange rate system does not apply to floating rates, and this may be the source of much of the confusion today.
Under a state currency system with floating exchange rates, the natural, nominal, risk free rate of interest is zero. As many other key rates of interest in the economy continue to follow the fed funds rate very closely, this will serve as the base rate in the economy, with markets determining the credit spreads through risk assessment. Furthermore, there are a number of reasons why allowing the rate of interest to settle at its natural rate of zero makes good economic sense. The conventional wisdom of a fixed exchange rate system does not apply to floating rates, and this may be the source of much of the confusion today.