In the world of low interest rates and bond yields, Steven Major, HSBC’s head of rates strategy, argues that the underlying picture remains remarkably stable. Despite grappling with the highest inflation and rates in decades, Major suggests that a return to quantitative easing or the “zero lower bound” is highly unlikely. He believes that the bigger picture is still one of “lower for longer” on policy and yields, a sentiment echoed by the Fed’s longer-term rate projections and New York Fed’s estimates of the theoretical long-run equilibrium interest rate. These projections suggest that rates and yields won’t remain high for an extended period of time. Central to Major’s outlook is the risk posed by debt, which he believes has the potential to depress yields and growth. He also mentions other long-standing trends such as ageing populations, rising inequality, and too much savings relative to too little investment as factors that contribute to lower rates and yields. With the economy set to slow down, investors may turn to Treasury bonds for guaranteed coupon payments and a yield between 4% and 5%. The Fed will provide updated projections on inflation, growth, and policy rates on September 20.