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Noah Smith

Get Used to It. Low Rates Are Here to Stay.

Central banks are powerless to push them higher.
Not so mighty after all.

Not so mighty after all.

Photographer: Samuel Corum/Anadolu Agency/Getty Images

Why are interest rates so low? For macroeconomists, this is one of the Big Questions in the world today. 

Government bond rates are at or near record lows all around the world. So are corporate bond rates, including junk bonds. Even the cost of equity capital is at or near an all-time low for most businesses. Whether you’re a government, a big corporation or a tiny startup, it has never been cheaper to obtain capital.