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Created by: basil.halperin and
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Make a Prediction

Prediction

It appears quite likely that developed countries will frequently find themselves with interest rates stuck at the zero lower bound (ZLB) in coming decades. Indeed, the Eurozone never truly left the ZLB after the Great Recession, and the United States left in 2015 but returned to the ZLB during the COVID-19 recession. Financial markets forecast, however, that the US will leave the ZLB in 2022 as the Fed is expected to raise its policy rate multiple times. Nonetheless, it seems highly probable that the US will hit the ZLB in the whatever the next economic crisis may be. As a base rate, the US had two zero lower bound episodes in the last 50 years -- both of which were in the last 15 years.