Continuing with interest rates, the attached chart shows real yields going back more than 200 years, highlighting that the only time real yields are negative for any period of time is during episodes of high debt. Given current debt levels, real yields are likely to remain very low for the foreseeable future, even if we are now seeing some cyclical pressure.

Therefore, with such high debt levels, which are likely to increase significantly, real yields will probably have to remain artificially low for a very long time. Any return to anything close to long-term averages would have serious consequences for debt sustainability. The Fed is likely to intervene long before this point is reached.