The Nov. 3 Financial Times publishes two competing “narratives” about what is going to happen with interest rates, each making up stories about inflation to justify their desired conclusions. First, there is [an article](https://www.ft.com/content/afbf891a-dea7-4536-b253-8e0fe0fbf82a
headlined “BlackRock says investors set to face 5.5% long-term borrowing costs.” It quotes Jean Boivin, head of the BlackRock Investment Institute and a former deputy governor of the Bank of Canada, at some length—noting that BlackRock is, after all, “the world’s largest asset manager.”
They see 5.5% interest rates sticking around for the next five years. “We think 5.5 per cent long-term 10-year yields in the US is the level that seems consistent with the macro backdrop in the next five years,” Boivin told the Financial Times. The article notes that the last few days saw a rally in government bonds in both the US and Europe, as market “conviction has grown that central banks have reached the end of their interest rate raising cycles.” But Bovin isn’t convinced: “We see inflation on a rollercoaster: falling now but then starting to unsettle some time after next year.”
