Fed's Rate Cutting Campaign: Where Do We Go from Here?

Yesterday's decision to keep short-term interest rates unchanged marks month 26 of the current interest rate cutting campaign, Fed chief Ben Bernanke outdoing his predecessor Alan Greenspan in almost every way.
Is there any reason to think that the current cycle will see interest rates rise sooner than they did last time when it took a full 42 months from the first cut to the first baby-step hike?

More importantly, what does the chart above portend for next time, or, do we now share the same future as 1990s Japan where there is no next time - it's ZIRP from here on out?

Comments

[Roger Knights:]

The fed's hand would/will be forced if/when a Treasury auction is underbid/fails.

Nov 05 10:09 AM