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Mark Gongloff

‘Interest Rates’ May Be a Thing of the Past

We’re heading back toward the zero bound and may never leave.

Get used to signs like these.

Get used to signs like these.

Photographer: Tim Boyle/Getty Images North America

In the year 2117 Austria will very nearly be beachfront property, and one of its 100-year government bonds will mature. During that time, investors (and/or their descendants and/or their brains downloaded into robots) who bought a reissue of the bond this week will enjoy a whopping yield of … 1.17% per year.

Though that is less than euro-area inflation, this bond issue was in hot demand, writes Marcus Ashworth. This is the latest example of what we described earlier this week as a desperate scramble for yield in a world where central banks are pushing interest rates toward zero … and below.