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You’re right, negative real returns definitely happen - but that’s not the interest rate. Interest rates apply to loans, not assets.


The real natural rate should be in line with the private markets with regards to safe, liquid short term assets. There is an issue when you hit 0% nominal, called the zero lower bound problem (https://en.wikipedia.org/wiki/Zero_lower_bound). Mechanically you can solve that by keeping inflation high enough that you don't reach negative nominal rates even when you have negative real rates.




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