CONCLUSION
Core nominal rates are under the implicit or explicit control of central banks. In the space of core long term rates, it pays off not to exclude the unexpected.
Global business condition indicators, especially as gauging the potential once the pandemic fades, tell us to prepare for higher rates. Central bank policy tells us that purchase programs will be the norm over the next couple of years in order to support fiscal policy initiatives. Monetary policy rates will remain at the effective lower bound, with the potential to shift lower, over the next three to five years. The business cycle market indicators are clashing with central bank all-in policies. The trend for lower real rates is currently strong.
If anything, expect and prepare for higher volatility levels in nominal rates over 2021 and beyond.