Neutral Rate Gaps Widen on Swing to Stimulus

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Neutral Rate Gaps Widen on Swing to Stimulus

Long-term borrowing costs in the U.S. and Canada edged into restrictive territory in 2018 before returning to an accommodative position in the opening months of 2019. That’s the main finding of Bloomberg Economics’ study of neutral rates across major advanced economies. It helps explain the market sell off last year and supports BE’s view that the first quarter will be the low point for growth this year.

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