The Fed could be locked into zero rates for five years, or even longer

Interest rates near zero likely will stay in place not for months but instead years as the Federal Reserve seeks to re-engineer an economy characterized by low inflation and an uneven labor market. Wall Street is prepping for a return to the post-financial crisis days, when rock-bottom short-term rates prevailed for seven years before the Fed even tried moving them higher. Fed officials have outlined a revised policy in which it now will target “average inflation,” meaning a higher tolerance for inflation above 2% before hiking interest rates from current levels. In the past, the Fed would look to rate cuts when unemployment began to fall as a sign that inflation would not be far behind. In the present circumstances, then, the remaining question will be how deep the Fed’s commitment to inflation will run, what will be considered full unemployment, and how many years that will mean for zero interest rates.
Source: CNBC – Bonds