But in the current situation,
where nominal interest rates are constrained because they can't go below zero, a small increase in expected inflation could be helpful.
Not exact matches
While there are some signs of recognition such as the Fed's reduction in its estimated neutral rate from 4.5 percent to 3.0 percent during the last 2 years, the IMF's explicit use of the term secular stagnation in its World Economic Outlook, ECB president Mario Draghi's call for global coordination and greater use of fiscal policy, and Japan's indicated
interest in fiscal - monetary cooperation, policymakers still have not made sufficiently radical adjustments in their world view to reflect this new reality of a world
where generating adequate
nominal GDP growth is likely to be the primary macroeconomic policy challenge for the next decade.
They also warn that because of extended zero -
interest policy by the Fed, security valuations have advanced to the point
where prospective
nominal total returns on a conventional portfolio mix are likely to average well below 2 % annually, with negative real returns, over the coming 12 - year period.
The list of 50 is also
interesting in that it appears to include Pendle (an almost certain Conservative gain on current form) and Penge (
where the
nominal 2005 outcome puts the Lib Dems third).
At a 10 - year Treasury yield of 1.7 %,
interest on reserves of 0.25 %, and a monetary base now at about 18 cents per dollar of
nominal GDP (see Run, Don't Walk), further purchases of long - term Treasury securities by the Fed would produce net losses for the Fed in any scenario
where yields rise more than about 20 basis points a year, or the Fed ever has to unwind any portion of its already massive positions.