Direction Of U.S. Interest Rates Defies Prediction: Krugman

For everyone on Wall Street, in corporate suites, and across newsrooms predicting the direction of US interest rates, many would likely agree that being wrong has been the year’s only constant, David E. Rovella wrote for Bloomberg News.

It’s entirely unclear where interest-rate levels are headed over the medium term.

Even Paul Krugman says he has no idea what’s going on.

The Nobel laureate in economics said it’s entirely unclear where interest-rate levels are headed over the medium term, with arguments in favor of both a return to pre-pandemic levels and a higher-for-longer outcome.

“On interest rates I am fanatically confused,” Krugman said Tuesday on Bloomberg Television’s Wall Street Week with David Westin, regarding whether borrowing costs will remain above pre-COVID levels.

“Anyone who claims to know for sure what the answer is to that is deluding themselves.”