Aggressive quantitative easing should raise long-term interest rates, because effective monetary stimulus raises them.

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Where this collides

• In tension with

  Low interest rates reflect underlying fundamental economic factors rather than central bank policy choices.

  Sumner says effective monetary stimulus raises long-term rates, which makes the rate a readout of what the central bank did. Blanchard says the decades-long level of safe rates reflects fundamentals rather than policy choices. Both can hold over different horizons, and how much of the rate a central bank actually owns is the live question between them.

Shared subject first, then similar wording. They may agree or disagree.

• A bank should be managed against the fat tails it can imagine, not against the stress test its regulator hands it. JDJamie Dimon16 Jul 2025interest rates
• A central bank can eliminate a self-fulfilling ('sunspot') debt crisis simply by credibly committing to buy as many bonds as needed at the low interest rate. OBOlivier Blanchard1 Jun 2022interest rates
• A Fed easing move being immediately followed by a sharp jump in long-term rates suggests the Federal Reserve has lost control over the narrative governing bond-market expectations. BDBrad DeLong15 Oct 2026interest rates
• A fiscal expansion when the economy is already at potential output prompts monetary tightening that dampens or eliminates its effect on output. OBOlivier Blanchard1 Jun 2022interest rates
• A government's debt dynamics are a household's or a company's, except that it can print money and tax -- and those two powers are what change the ending. RDRay Dalio21 Aug 2026interest rates

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