Ten-year sovereign bond yields in G-7 economies excluding Japan currently range from just above 1/2 percent to just above 2 percent – well below the average range of 4 1/2 to 5 percent in the decade before the financial crisis.
7 This observation receives substantial support from a number of rigorous empirical papers over the past year that have estimated the longer-run equilibrium federal funds rate to be lower now than previously. 8 The projection of a relatively low neutral rate over the next few years also receives some weight in the September 2015 Summary of Economic Projections.