Chris Dillow 

The profits threat

Chris Dillow

Chris Dillow
The profits threat

The US economy has entered a period of what former US Treasury Secretary Larry Summers calls secular stagnation – sustained slow growth. We know this because there are fears of recession even though economic policy is super-loose, with real interest rates low and government borrowing high. Financial markets expect the malaise to continue. The yield on 10-year inflation-proofed Treasuries is just 0.1 per cent; if investors were optimistic about growth it would be much higher simply because they would be anticipating much higher interest rates.

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