The suggestion is we are in period of lower returns that will continue for a long time. A report dated April 2016 from ECRI, a research firm in New York that studies economic cycles, says the growth rate of recoveries has been declining for decades. The report says the Fed may be out of ammo to fight the next recession. The issue, the report continues, is the long-term decline in trend growth and that extraordinary monetary policy efforts cannot change. Private sector capital investment has taken a big hit. Policy initiatives, such as zero interest rates and quantitative easing, ended up being non-productive (except it helped fuel a bull stock market and a real estate boom). Growth in the broad economy remains sluggish. ECRI makes the point that the FED can indefinitely forestall the next recession remains wishful thinking.
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