How high will long-term interest rates rise?

We examine the situations of the United States, the euro zone and Germany, and start with econometric estimat ions that explain the long-term interest rate based on expected short-term interest rates, expected inflation in the long term, the size of the central bank’s balance sheet (it is the stock of bonds held by the central bank that explains the long-term interest rate and not the flow of its bond purchases) and risk perception. Using assumptions for the medium-term values of central bank key interest rates, expected inflation and the size of central banks’ balance sheets, we can then estimate the limit value of 10-year interest rates. According to these calculations, it is: 1.7% in the United States; 0.3% in the euro zone; -0.2% in Germany; i.e. more or less the same levels as today. This results from a fall in expected inflation, a small rise in short-term interest rates and continued monetary base expansion .