ChainCatcher reported that according to the Wall Street Journal, a paper written by two economists from the Federal Reserve Bank of Kansas City has attracted market attention. The article pointed out that US interest rates may remain above 5% for much longer than investors expected, perhaps until 2026.

These economists say that while the Fed has tightened policy over the past year at perhaps the fastest pace since the 1980s, rapidly rising inflation is pushing the equilibrium interest rate in the U.S. economy up even faster. Because the pace of economic growth remains so strong (U.S. GDP grew at a 2% annualized rate in the first quarter, according to the latest estimates), the Fed may need to keep interest rates at or above current levels for more than three years before the Fed's preferred inflation measure, the PCE index, returns to the central bank's 2% target.