ZIRP: How Long?

Click to enlarge.

I'm not suggesting that World War III will soon break out, but I am suggesting that ZIRP may be here for far longer than most think possible. We're currently "only" four years into the chart.

November 18, 2009
Fed official: Rates could stay put until 2012

Federal Reserve Bank of St. Louis President James Bullard said policy makers may not start to raise rates until early 2012 while facing a “too low for two long” argument that may “weigh heavily” on the central bank.

August 17, 2011
Plosser Says Federal Reserve May Have to Increase Rates Before Mid-2013

Charles Plosser, president of the Federal Reserve Bank of Philadelphia, said the Fed will probably need to raise interest rates before mid-2013 and that policy makers should have waited to see how the economy performed before pledging to hold rates at record lows for two years.

January 25, 2012
Fed: Benchmark Rate Will Stay Low Until ’14

Federal Reserve officials said their benchmark interest rate will stay low until at least late 2014 and anticipate that unemployment will remain high and inflation “subdued.”

December 12, 2012
Fed Officials Forecast Main Rate to Stay Near Zero Until 2015

A majority of Federal Reserve officials don’t expect to raise the main interest rate until 2015, when they forecast the jobless rate will fall to between 6 percent and 6.6 percent.

The date of the interest rate hike is a procrastinator's dream. It *always* appears to be about 2 years away. You know what they say. Never put off for tomorrow what you can do two years from now! This is no doubt a big shocker to the ivory tower crowd.

For what it is worth, this has definitely been one of my better calls since starting this blog.

January 31, 2008
The Death of Real Yields Continues

If I had but one prediction, it would be that it will grow increasingly difficult to make money off of money going forward. That's why I continue to track what I call the death of real yields.

Source Data:
St. Louis Fed: 3-Month Treasury Bill: Secondary Market Rate