4 Questions I'm Pondering at the Moment

Is “low rates and low inflation forever” the new consensus? Economists and pundits have been predicting a rise in interest rates for a number of years now, but the professional investors I talk to these days almost all seem convinced that rates will stay “lower for longer.” Many of the investors, portfolio managers and analysts I meet with are probably macro tourists so this is anecdotal, but I get the sense that low interest rates and low inflation for the foreseeable future is now the consensus among these professional investors. It’s amazing to me how quickly opinions have shifted from the 2009-2013 thinking of “interest rates and inflation are going to scream higher because of the Fed” to the 2014-2015 mindset of “we think interest rates and inflation will be subdued for the next decade or so.” The secular stagnation thesis is gaining support.

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