The fundamental causes of the current low level of long-term interest rates

Long-term interest rates (globally and in OECD countries) are currently very low, which can be attributed to three fundamental causes: Labour market flexibili sation , leading to weak growth in labour costs and to low inflation; Excess global savings ( ex ante ), driving down equilibrium real long-term interest rates; The decline in the volatility of inflation, leading to lower volatility in expected future short-term interest rates and therefore a lower term premium.