Zero interest rates are an anomaly and are unlikely to return “anytime soon,” Economist Dan Basse, of AgResource Company told nearly 300 Meristem dealers, partners, and guests at the company’s Breakthrough to Excellence Dealer Partner Exchange event recently in Delavan, Wisconsin.
“I think we are to a new normal where we will see interest rates between three and seven percent. You may actually be able to go the bank and get a five percent yield on your money, isn’t that nice?” he smiled.
“My staff took a look at interest rate trends through the years, but we didn’t just go back a few years, we went all the way back to 3,000 B.C.,” said Basse as he shared a chart. “So this is 5,000 years through the Romans and the Greeks and all the way forward – but the point I want to leave with you is this: In 5,000 years, how many times do you think interest rates have been zero, where we’ve gotten used to them being over the past 16 years?” The answer, he related, is 37 years.
“We are not going back to zero percent interest rates anytime soon,” he said, adding that instead, “think about inflation holding at three percent and the Fed having a tough job (with figuring this out) over a long period of time.”Back