Summary: Since 2010 I have said that the economy is locked in slow-mo and the Fed will not start a new rate cycle. It’s even more true today than in 2010.
- Many investors and economists are convinced that the Fed will soon end its near-zero interest rate policy and begin raising rates – “normalizing them”.
- As I and others have said since the crash, these times are not normal (i.e., the post-WWII era has ended).
- Most economic indicators show flat or slowing economic growth.
- The developed world has fallen into secular stagnation.
- The next event is not a boom requiring higher rates, but a recession.
Short-term riskless US rates are set in the world’s largest market:
when will rates return to normal?
We have been told for six years that soon interest rates will rise. During that time, the right-wing’s inflationistas have predicted rising inflation, or even hyperinflation (remember the 2010 “Obama will turn America into Zimbabwe” scare?). Incredibly, many experts still believe this despite…