Interest rates have returned to a higher floor and are likely to stay there for some time, say BNY Mellon Investment Management's chief economist Shamik Dhar, and senior economist, Sebastian Vismara. In an in-depth paper called Tidal Forces: Dissecting the interest rate equation, the two discuss the five key areas influencing the direction of rates.
Rather than today being referred to as a new normal, this is perhaps more a case of a return to normal, after years of unprecendented action that led to historically depressed rates. The recent surge in inflation harkening memories of the 1970s is just one example of how a glance back may show us the way forward.