Why Low Interest Rates Will Return — Again and Again
Forces that have been pushing borrowing costs down for as long as we can remember haven’t vanished.
Another dawn for low rates.
Photographer: Al Drago/BloombergTalk about a pivot. The battle against soaring prices that’s raged for more than a year may yet give way to something that appeared consigned to history: Low interest rates and inflation that’s consistently well behaved, perhaps to a fault.
This won’t happen tomorrow and inflation might not become quite so anemic as in the decade after the global financial crisis. But 18 months into the most aggressive tightening by central banks in a generation, a corrective narrative is starting to emerge. The current period of relatively high borrowing costs may be the outlier, rather than the easy money that characterized financial life in the pre-pandemic era. The idea, strange as it might seem when judged by headlines of the past year, got a lot of attention at a high-powered Singapore symposium on Friday.