Global Economics Update Latest thoughts on r* and where rates end this cycle In detailed analysis last year, we concluded that equilibrium nominal interest rates would settle at between 3% and 4% in advanced economies in the next ten years. We maintain that opinion and in fact... 30th July 2024 · 4 mins read
Capital Daily Have JGB yields found their sweet spot? The yield of 10-year Japanese government bonds (JGBs) is now almost where we forecast it to be at the end of the year. Admittedly, we doubt that the Bank of Japan (BoJ) will tighten policy as quickly... 28th May 2024 · 5 mins read
Global Economics Focus Financial stability in a world of higher interest rates Although the recent transition to a higher interest rate climate has not caused any lasting or systemic financial flare ups, it is probably too soon to sound the all-clear. And while a higher interest... 8th February 2024 · 19 mins read
China Economics Update China to buck the trend of rising equilibrium rates In much of the world, interest rates are likely to settle at higher levels than was the case prior to the pandemic. But China is a key exception, with its shrinking population, slowing productivity... 29th November 2023 · 5 mins read
UK Commercial Property Update Higher r* means more pain for property Our recent r* work reinforces the view that property yields will stay relatively high longer term. That implies global returns in low single digits over the next decade or so, well below pre-pandemic... 27th November 2023 · 4 mins read
Emerging Markets Economics Update The end of ultra-low rates and what it means for EMs In our flagship report on the neutral interest rate (r*), we argued that r* in developed markets will rise and be higher than is widely assumed. (The full report can be accessed here.) For most EMs, r... 20th November 2023 · 4 mins read
Global Markets Update Raising our forecasts for the 10-year Treasury yield We still expect the 10-year Treasury yield to fall in the coming quarters. But we’ve revised up our projections for that yield from now to end of 2025, and now think it will reach its cyclical low in... 19th October 2023 · 3 mins read
UK Economics Update Higher r* - bigger fiscal challenge, headwind for real asset prices As our new higher estimate of the real neutral interest rate, or r*, for 2030 appears to be above the assumption priced into the financial markets, we think that in the 2030s 10-year gilt yields will... 19th October 2023 · 6 mins read
Europe Economics Update Raising our long-run ECB interest rate forecast We have recently published detailed analysis arguing that equilibrium interest rates in advanced economies are now higher than they were before the pandemic, and that they will continue to rise over... 17th October 2023 · 3 mins read
Capital Daily Cyclically higher for shorter; structurally higher for longer We think equilibrium real policy rates in advanced economies will continue to rise over the next decade or so. That has profound implications for government bond yields and risky asset valuations. 17th October 2023 · 5 mins read
Event Drop-In: r* and the end of the ultra-low rates era 1698755400 What will a world of structurally higher interest rates look like? How will central bank behaviour change in the coming years? What will this mean for market returns?
Global Economics Focus Chapter 4: Financial market implications Higher real and nominal Treasury yields in 2030, relative to the past decade, are one reason why we expect investors to be demanding a greater real return from risky assets in 2030 than they are now. 17th October 2023 · 0 mins read
Global Economics Focus Chapter 3: Where will inflation (and nominal rates) settle? Why we expect a more volatile inflation outlook in the coming years, and how central banks are likely to respond in setting nominal rates in this new normal. 17th October 2023 · 0 mins read
Global Economics Focus Chapter 2: How will the savings/investment balance affect r*? Why savings and investment incentives will become better aligned in the next decade than over the past 20 years, causing r* to rise. 17th October 2023 · 0 mins read
Global Economics Focus Chapter 1: Will stronger potential growth boost r*? Examining how the drivers that have been pulling down equilibrium rates are fading, and the strengthening forces that will push rates higher in the coming decade. 17th October 2023 · 0 mins read
