A prominent Harvard University economics professor once suggested that the U.S. economy was headed for what he called “secular stagnation.” Extended periods of strong economic growth were no longer likely, he said, because of a chronic shortfall in demand. I’m not referring to Harvard’s Professor Lawrence Summers, who holds this secular stagnation view today.
You can see this on my next slide, where the grey shaded area represents the difference between the median fed funds rate projections in the New York Fed’s Survey of Primary Dealers and the nominal fed funds futures rates.