ClaimsJeremy Grantham

“In short, I think lower rates than those in effect pre-1997 are likely to be with us for years”

Jeremy Grantham, GMO co-founder, letter author 2017 1Q 2017 GMO Quarterly Letter: Up At Night (GMO)

Prediction Economics and markets

Grantham thinks interest rates lower than those before 1997 are likely to persist for years.

Unresolvable The public record could not settle it.

Prediction: Statements about events outside the person's control, checked once they fell due: did they come true?

The second judge would not resolve this claim; the verdict shown is the first judge's.

Said for an organisation they lead or work for; it counts on both records.

What would count as true or false

The prediction is that US interest rates would stay below their typical pre-1997 levels for several years after 2017. Judge at end-2022. Compare 10-year Treasury yields (nominal and real) with their pre-1997 averages (roughly 1960–1996, or the 1990–1996 average of about 6–7% nominal), and the federal funds rate the same way. TRUE: from 2017 through 2022, both nominal and real long-term rates stayed below their pre-1997 typical levels throughout. MOSTLY TRUE: they were mostly below, with brief exceptions or one secondary measure above. MIXED: one measure (for example nominal yields) stayed lower while the other (for example real yields) returned to pre-1997 levels for much of the period. MOSTLY FALSE: rates returned to pre-1997 levels within a few years, but only around the end of the period. FALSE: rates returned to or passed pre-1997 typical levels soon after 2017 and stayed there.

Set before the research began.

Evidence (9)

  1. E1 10-year Board of Governors of the Federal Reserve System (H.15 data download)

    “Market yield on U.S. Treasury securities at 10-year constant maturity, quoted on investment basis”

  2. E2 10-year Board of Governors of the Federal Reserve System (H.15 data download)

    “2022-10,3.98”

  3. E3 10-year Board of Governors of the Federal Reserve System (H.15 data download)

    “2020-04,0.66”

  4. E4 Table Data - Federal Funds Effective Rate Federal Reserve Bank of St. Louis (FRED), citing Board of Governors H.15

    “| 2022-12-01 | 4.10 |”

  5. E5 Table Data - Federal Funds Effective Rate Board of Governors of the Federal Reserve System (via FRED, Federal Reserve Bank of St. Louis) · 3 August 2020

    “| 2022-12-01 | 4.10 |”

  6. E6 Table Data - Federal Funds Effective Rate Board of Governors of the Federal Reserve System (via FRED, Federal Reserve Bank of St. Louis) · 3 August 2020

    “| 2018-12-01 | 2.27 |”

  7. E7 Table Data - Federal Funds Effective Rate Board of Governors of the Federal Reserve System (via FRED, Federal Reserve Bank of St. Louis) · 3 August 2020

    “| 1995-01-01 | 5.53 |”

  8. E8 Table Data - Federal Funds Effective Rate Board of Governors of the Federal Reserve System (via FRED, Federal Reserve Bank of St. Louis) · 3 August 2020

    “| 2020-04-01 | 0.05 |”

  9. E9 30 U.S. Government Publishing Office (govinfo), Economic Indicators series

    “Sources: Department of the Treasury, Board of Governors of the Federal Reserve System,”

Reasoning

The evidence gives only isolated monthly nominal readings for 2017–2022 (E2, E3, E4–E6, E8), all below the pre-1997 nominal benchmark. None of it shows the full-period path or the period high. No evidence item gives real or TIPS yields, which the criteria need in order to tell "mostly true" apart from "mixed".

Cite this claim

Jeremy Grantham, “Grantham thinks interest rates lower than those before 1997 are likely to persist for years.” (said 2017). Verdict: unresolvable. Reliability API, claim c_9bbd7e7310d3, method 0.1.0+28da144b, dataset release v1.1.2. https://epistacklabs.com/claims/c_9bbd7e7310d3

This claim is in dataset release v1.1.2, with the same verdict.

Reply to this claim

For Jeremy Grantham, or someone speaking for them: a correction or counter-evidence. Replies are read before anything is shown; an approved reply shows your name, role, date, statement and link. Your email address is never shown and is deleted 30 days after the decision (privacy).

More prediction claims by Jeremy Grantham

  1. Resolved false Prediction January 2023
    “we can conclude that the final low for this market might be well into 2024.”

    The final low of this bear market might come well into 2024.

  2. Mixed Prediction January 2023
    “near certainty it was a year ago, is much more likely than not.”

    A continued market decline of at least substantial proportions is much more likely than not.

  3. Mostly false Prediction January 2023
    “after a bloodbath is not unusual and may very well not outlive January.”

    The January 2023 rally may well not outlive January.

  4. Mostly true Prediction January 2023
    “may help to support the market for a few more months.”

    The Presidential Cycle's positive influence may help support the market for a few more months.

  5. Resolved true Prediction 31 August 2022
    “Each cycle is different and unique—but every historical parallel suggests that the worst is yet to come.”

    Grantham says historical parallels suggest the worst of the current market downturn is still to come.

All of them

Verdicts are made automatically; how verdicts are made.