Drop-In: Where is r* now? Catching up on equilibrium real rates

Two years ago, we argued that structural forces – from AI-driven productivity gains to ageing demographics and higher government borrowing – would push equilibrium real interest rates in the US and across developed markets far above what markets were then pricing. Recent bond market moves now suggest investors may have overtaken our original estimates.

Are markets signalling an even higher r*? Could the surge in AI investment lift the neutral rate beyond previous projections? And what role is Donald Trump’s policy agenda playing in shaping the outlook?

Join our Global and Markets economists on Tuesday 30th September at 1000 ET/1500 BST for this 20-minute online briefing, where they’ll answer your questions and address key issues, including:

• How r* estimates have shifted since our original analysis
• The structural forces that could push r* higher – or lower
• The role of rising term premia in bond market signalling.