Ultra-Low Rates Could Last Another Decade [iShares Barclays 20+ Yr Treas.Bond (ETF), ProShares UltraShort Lehman 20+ Yr(ETF)]

Given the magnitude of the crisis, record levels of unemployment and debt, the best way to answer that question is by observing what the Fed did during a similar time period—the Great Depression.

How long did rates stay low then? Nearly 15 years.

fed funds rate depression
Source: Macro Exposure

As the Fed has made clear, given current economic conditions, they don’t expect to raise rates for a “considerable time”. If you think our current experience is close to the Great Depression and it will take just as long to recover, then we may actually be looking at ultra-low rates for many years to come…or decades, as bond king Bill Gross has stated.

Question is, what will this do to the stock market and other assets as yield-starved investors continue to chase returns?

This article is brought to you courtesy of Cris Sheridan from Financial Sense.

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