By darkflame on Skatehive
Here is an interesting article that I discovered. Authors: Sophia Cho, Thomas Mertens, John C. Williams "Financial market derivatives provide real-time forward-looking measures of the perceived risk of reaching the zero lower bound in the future. This ZLB risk tends to fall with higher expected levels of interest rates and tends to rise with interest rate uncertainty. Compared with the past decade, current data show that expected levels of future interest rates are high. Nevertheless, ZLB risk remains significant over the medium to long term, similar to levels observed in 2018, due to recent elevated uncertainty." https://www.frbsf.org/research-and-insights/publications/economic-letter/2025/07/zero-lower-bound-remains-medium-term-risk/ PDF -> https://www.frbsf.org/wp-content/uploads/el2025-16.pdf "With an expected level of interest rates around 3–4%, the perceived risk of returning to the ZLB over the next two years is about 1%. This risk increases to about 9% at the seven-year horizon