Today’s low interest rate environment – zero bound and down

November 2019

To combat the effects of the Global Financial Crisis (GFC) of 2007-2009, central banks around the world aggressively lowered interest rates and ultimately engaged in non-traditional policies such as quantitative easing and negative deposit rates to encourage investment and growth.

Ten years after the GFC, interest rates remain well below historical norms, with large portions of some countries’ yield curves in negative territory. In this paper, we will discuss the current environment, how we got here, and what implications “lower for longer” might have on return assumptions, asset allocation, and overall economic activity