"Following a moderation in the pace of the recovery, indicators of economic activity and employment have turned up recently, although the sectors most adversely affected by the pandemic remain weak. Inflation continues to run below 2 percent."
"[It] sounds like the perfect scenario for investors and the outlook and you're seeing market response to this very optimistic view. Monetary policy is going to remain largely accommodative almost regardless of what happens with interest rates, inflation and asset prices."
"The discussion of longer-term trends in real rates is often confined to the second half of the 20th century, identifying the high inflation period of the 1970s and early 1980s as an inflection point triggering a multi-decade fall in real rates. And indeed, in most economists' eyes, considering interest rate dynamics over the 20th century horizon – or even over the last 150 years – the reversal during the last quarter of the 1900s at first appears decisive..."
"Despite temporary stabilizations such as the period between 1550-1640, 1820-1850 or in fact 1950-1980 – global real rates have shown a persistent downward trend over the past five centuries..."This downward trend has persisted throughout the historical gold, silver, mixed bullion and fiat monetary regimes...and long preceded the emergence of modern central banks."
"There have been two previous periods in history that have had the necessary ingredients to support rising interest rates. The first was during the turn of the previous century as the country became more accessible via railroads and automobiles, production ramped up for World War I and America began the shift from an agricultural to industrial economy."The second period occurred post-World War II as America became the 'last man standing'...It was here that America found its strongest run of economic growth in its history as the 'boys of war' returned home to start rebuilding the countries that they had just destroyed."
"Investors have often talked about the global economy since the crisis as reflecting a "new normal" of slow growth and low inflation. But just maybe, we have really returned to the old normal."Very low rates have often persisted for decades upon decades, pretty much whenever inflation is quiescent, as it is now...The real aberration looks like the 7.3 percent average experienced in the United States from 1970-2007."
"Whatever the precise dominant driver – simply extrapolating such long-term historical trends suggests that negative real rates will not just soon constitute a 'new normal' – they will continue to fall constantly. By the late 2020s, global short-term real rates will have reached permanently negative territory. By the second half of this century, global long-term real rates will have followed..."