The downward trend in nominal term premiums likely reflects both lower inflation risk and the fact that, with inflation expectations anchored, nominal bonds have become an increasingly good hedge against market risk. That has made bonds a more  2  See Engen, Laubach, and Reifschneider (2015).
Many of these forces continue to operate in today’s 6 economy, conceivably with greater force than in the late 1990s. In addition, measured labor productivity has continued to increase rapidly since early 2001--remarkably so, considering that productivity tends to be strongly procyclical--raising the possibility that we have underestimated the degree to which innovation and better use of existing resources have increased potential output.