The key question for long-term investors: What is the cause of the low long-term interest rates?

Long-term interest rates are now very low in the United States, the euro zone and other OECD countries. For long-term investors, it is crucial to know whether or not long-term interest rates are going to remain durably low. If the low level of long-term interest rates is due to enduring structural causes (excess savings, excess demand for risk-free bonds), then investors can buy bonds with very low interest rates ; If the very low level of long-term interest rates is due to the expansionary monetary policies, themselves due to low inflation rates, then long-term investors should know that long-term interest rates will rise again in the future if inflation rises (it is very unlikely that the Federal Reserve or the ECB would not react to resurgent inflation), which could result from either oil prices or a change in the functioning of labour markets.