The biggest surprise for the world economy next year may be the fact that interest rates remain stubbornly low and Central Bank policy worldwide has fallen short, according to a group of economists and other experts we spoke with at a retreat in rural Maine. We asked them what potentially could be the number one shocker for the economy next year, and many were in agreement. ‘I suspect the biggest surprise will be that all of this monetary policy expansion we’ve done over the course of the last eight years doesn’t have the intended effect,’ said Guy Lebas, chief fixed income strategist at Janney. ‘The extent to which we still have low interest rates across multiple economies will be the surprise. I think that’s going to be with us for awhile,’ echoed Robert Eisenbeis, chief monetary economist at Cumberland Advisors. Another expert says a year from now, Japan will still be easing, even with negative interest rates currently.
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