Simple minded economists

Given that fact the long-term rate has to be above the short term rate, short term rates may move up, but they can’t go down. A similar situation was witnessed in Japan with their zero interest rate policy, where they maintained a positive yield curve through the decade.  The Denouement

Short term rates are not stuck at bottom, the Fed could simply disappear which it has done off and on in our history. Or the Fed could become a useless relic while we move on to a restructured banking system.

Economists often think that an equation defines history, not the other way around.