Research Affiliates: Not-So-Great Expectations: Why Real Interest Rates Won't Soar

Not-So-Great Expectations: Why Real Interest Rates Won’t Soar by Research Affiliates

In a recent piece from Research Affiliates, Shane Shepherd, Senior Vice President, Head of Macro Research, looks at the consensus on interest rates: they are set to fly. But if, as Research Affiliates expects, savings accelerate and real GDP grows slowly, then interest rates won’t rise very much anytime soon.

Ask anyone—anyone at all—and you will get the same answer. Whether it’s an offhand remark in the elevator or a solemn pronouncement in the board room, the message comes from all sides: Interest rates will shoot up.

Granted, they all say, we’ve had false alarms before. The consensus was that interest rates would rise in...