(1 August 2019, AFR, p27, Robin Harding)
‘Although interest rates touch almost every aspect of economic life, the developed world remains deep in denial about the consequences. Here are eight themes for investors and policymakers to ponder. This will be a discomforting, defining week for the global economy. That is not because the US Federal Reserve is set to cut interest rates. Rather it is because of the strikingly low level of rates from which the Fed will start: a range of just 2.25 to 2.5 per cent. After more than a decade of economic expansion, and despite everything from tariffs to tax cuts, it seems this is as high as US interest rates go. Meanwhile, the European Central Bank is debating whether to reduce its negative rate still further. Until this month, it was possible to imagine that pre-financial crisis levels of 4 to 5 per cent might eventually return. No longer.’
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