Do financial markets believe the long run will be different?

Do financial markets believe that the shocks affecting OECD economies (COVID, war in Ukraine, energy transition, population ageing) will significantly alter the long-run equilibrium? Of course, the se shocks have changed the short-run equilibrium. But is a different economy also expected in the long run? We look at long-run financial market expectations for nominal and real long-term interest rates and inflation in the United States, the euro zone and the United Kingdom. We see that financial markets expect: Higher inflation than before the subprime crisis, which is in line with our expectations; Similar nominal long-term interest rates to those seen before the subprime crisis; But lower real long-term interest rates than before the subprime crisis, which is not in line with our expectations. There are many reasons to believe that economies will actually be different in the long run, even if the COVID pandemic and the war in Ukraine end. The energy transition and population ageing are likely to give rise to lasting inflationary pressures and the return of a savings shortfall, leading to higher real interest rates.