Attention Economy


Thursday, December 15, 2022

The Interest Rate Regime Change Debate

Sea Change
https://www.oaktreecapital.com/insights/memo/sea-change
 
The past two decades of low inflation and near-zero interest rates were an ‘aberration,’ BofA says. Get ready for an economic ‘regime change’
https://fortune.com/2022/10/13/low-inflation-interest-rates-aberration-economic-regime-change-bank-of-america/
 
New era of inflation will bedevil central banks and bond markets
https://thehill.com/opinion/finance/3543857-new-era-of-inflation-will-bedevil-central-banks-and-bond-markets/
My Take from July 1, 2022:
We are facing an extraordinary moment of uncertainty regarding the future inflation (and interest rate) outlook. Will we relatively soon return to the low rate, low inflation and low growth (characterized as secular stagnation) dynamic that was the hallmark of the post-financial crisis era? Or are we entering a new era of sustained higher rates and elevated inflation? Nobody knows the answer for sure, but we shouldn’t underestimate the probability that we are in the midst of a consequential inflation regime change.