Virtually every financial publication has for some months now been declaring an end to the “easy money” era. Most of these articles seem to imply that the ongoing return to historically normal interest rates is something of a permeant, or at least, long term fixture. This sentiment is also very much echoed here on Reddit. I am finding little counter to this across most financial opinion sites, so I'm asking, what are the cases for a return to low interest rates and possible QE?
Perhaps the most obvious path would be that the hikes lead to a hard recession, forcing them to be almost entirely reversed (with possible QE in play also). Alternatively, if GDP is not growing at a satisfactory rate, could this also be a possible catalyst? What other scenarios could cause us to re-enter the era of low interest rates?
Leave a Reply