Low Long-Term Interest Rates as a Global Phenomenon

Jhuvesh SOBRUN Analyste de recherche principal, Banque des règlements internationaux (BRI).Contact : jhuvesh.sobrun@bis.org.

Philip TURNER Directeur adjoint du Département monétaire et économique, Banque des règlements internationaux (BRI). Contact : philip.turner@bis.org.

With much stronger international linkages between long-term interest rates in different currencies, ultra-low interest rates have become a global phenomenon. The real equilibrium policy rates (the natural rate) has fallen in many countries. Term premia in bond markets are low or even negative in many currencies. The fundamental causes of these developments, which suggest that the “new normal” for interest rates is lower than in the past, are still under debate. Time will tell.