Debt ratios for indebted individuals in different age groups Per cent 500 400 300 200 100 0 1 (27) 2 (33) 3 (38) 4 (42) 5 (47) 6 (51) 7 (56) 8 (61) 9 (66) 10 (76) Age deciles (average age within decile) Source: The Riksbank  Many borrowers do not reduce their debts, and those that do reduce them slowly Let me now also shed some light on how debts change over time. Between 2012 and 2013, 24 per cent of the individuals with mortgages increased their debts and 16 per cent had unchanged debts. Just over 60 per cent reduced their debts in the same period (see  BIS central bankers’ speeches  7  Chart 6). For those that reduced their debts in this period, the reduction corresponds to an average remaining amortisation period of 99 years. In other words, 40 per cent of the individuals that have mortgages have increasing or unchanged debts, and those that reduce their debts do so very slowly. Over the three years for which we have data, the proportion of individuals reducing their debts has in fact increased and the proportion increasing their debts has decreased. On the other hand, the increase in the proportion of individuals reducing their debts has been very small. All in all, the analysis of the Riksbank’s credit data thus shows that debt ratios are fairly evenly-distributed across income groups. They are also spread throughout the country. The analysis also shows that debt ratios are high even for older borrowers.
And that brings me to a theme of my remarks today: What does “normal” monetary policy look like going forward? Before I say even one more word, I should stress that what I have to say represents my own views and not necessarily those of the Federal Open Market Committee (FOMC) or anyone else in the Federal Reserve System. Strong, Strong, Strong My view on the U.S. economy is well summarized by the most recent FOMC statement, in which variations on the word “strong” appeared five times in describing the U.S. economy. 1 Central bank communication can be difficult at times, but, at least in this case, our message is very clear. Indeed, the Federal Reserve has attained its dual mandate objectives of maximum employment and price stability about as well as it ever has. Most indicators point to a very strong labor market—including an unemployment rate of 3.7 percent—and inflation is right on target. With fiscal stimulus and favorable financial conditions providing tailwinds to the U.S. economy, the outlook is for more strong growth. Let me put some hard numbers to that: I expect real GDP to increase by around 3 percent this year and by 2.5 percent in 2019. Assuming this forecast comes to fruition, this will be the longest expansion in U.S. history based on data going back over 150 years. This above-trend pace of growth should lead to continued solid job gains and further declines in the unemployment rate.