Long-term interest rates are going to remain abnormally low for a long time because they are influenced by the stock of bonds held by the central bank and not the flow of its bond purchases

We look at the situations of the United States, the euro zone and Japan. First, we show that it is the stock of bonds held by the central bank and not its bond buying flows that influences these countries’ long-term interest rates. We then defend the idea that central banks are not going to reduce the size of their balance sheets: long-term interest rates are therefore going to remain low for a long time, since the stock of bonds held by the central banks will remain high for a long time.