## The Thirty-Year Treasury Nominal Rate is Now at 2.73%/Year...

Suppose that we assume a normal-time nominal short-term interest rate of 5%/year, suppose that the market expects us to remain in a liquidity trap--with short-term safe nominal interest rates at 0--for k years, and then expects short-term safe nominal interest rates to normalize immediately…

Then the 30-year-bill breakeven--the date k must be expected to be in order to get the same expected return from investing in long-term bonds as from rolling over Treasury bills…

…is k=13.5 years…

That puts us out at the end of 2026 before we exit this current liquidity trap…

And if we suppose that investors are somewhat averse to the risk of temporary capital loss associated with 30-year bonds--that the 30-year bond rate is above the average of expected future short rates--then k is even longer…