Slower ‘New Normal’ U.S. Growth May Cap Interest Rates

The U.S. economy is clearly transitioning to a “new normal.” Considering the weak trend in demographics and productivity growth, the potential growth rate of the U.S. economy could be considerably slower than its 2.5-3.0 percent normal pace, with the likelihood that potential GDP in real terms will probably average only around

1.75-2.00 percent in coming years.

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