Because interest rates are the mechanism that brings the supply of savings and the demand for investment funds into balance, more saving and less investment imply a lower neutral interest rate. Although we can’t directly measure the neutral interest rate, it is something that can be estimated in retrospect.
A pick-up in the global economy has been delayed, due mainly to the intensified and prolonged U.S.-China trade friction and the continued slowdown in the Chinese economy, and the global economy has not yet moved out of this situation. What is the outlook for the global economy next year?