Global Macro Views
Authors & Contributors
The Global Macro Forum
Advanced economies’ fiscal expansion in response to COVID-19 has been significantly larger than during the Global Financial Crisis.
We expect central banks to keep policy rates at their effective lower bounds for at least two years and leave lending and asset-purchase facilities open longer than strictly necessary to support market functioning. The secular combination of lower equilibrium real rates and lower inflation implies that the renormalization of policy rates, when it comes in the fullness of time, will be to a relatively low level as judged by history.