The day after, the same newspaper came with a headline: “We were the first to announce the death of the author.” We have observed such capabilities emerging among our market players and commentators. And that augurs well for the stability of our financial industry.
Nominal and real interest rates in advanced economies, both short and long-term rates, have trended down [Figure 1]. Financing costs and real interest rates have been lower than during the past 150 years. [3] This reflects structural factors such as aging populations, rising savings rates, and a slower pace of technological innovation. [4] Expansionary monetary policy has certainly played a role as well.