Long-term real rates will be low in US – Minneapolis Fed study

Dampened productivity and ageing population will drag down actual cost of borrowing, say authors


Economists forecasting higher long-term real interest rates in the US are wrong, according to new research from the Federal Reserve Bank of Minneapolis. 

Slow productivity growth and an ageing population will continue to exert downward pressure on real rates, write Andrea Raffo and Jeff Horwich. Although higher government debt levels could push rates upward, the authors believe the effect may be “comparatively small”. 

“The fundamental forces keeping neutral interest rates low in the long run

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@centralbanking.com or view our subscription options here: http://subscriptions.centralbanking.com/subscribe

You are currently unable to copy this content. Please contact info@centralbanking.com to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Central Banking? View our subscription options

Register for Central Banking

All fields are mandatory unless otherwise highlighted

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account