Why the era of negative rates could return.

So, there’s been this popular idea floating around among central bankers since the inflation chaos post-COVID: everything’s changed for good.

A lot of folks are convinced that we’ll never see zero interest rates or negative rates again, and that the neutral interest rate has gone up. But honestly, I haven't heard a solid reason for that, especially with AI about to shake things up.

Sure, there’s a lot of chatter about deglobalization, but I think that’s blown out of proportion. And demographic arguments? Not really buying them either. Back in July, I suggested it might be a good time to buy bonds, and lo and behold, they took off on a nice rally. But now, with election-related fiscal concerns creeping in, a lot of that momentum has faded, even though we’re still seeing inflation drop.