But: long-term real rates are low

The US 30-year real interest rate ended 2022 at 1.6%. Over the full year it averaged 0.7%, and as recently as March was below zero. Looking at a shorter time horizon, the US 10-year real interest rate is 1.6%, and similarly was below negative one percent as recently as March.

(Data sources used here are explained in section V.)

The UK in autumn 2021 sold a 50-year real bond with a -2.4% rate at the time. Real rates on analogous bonds in other developed countries in recent years have been similarly low/negative for the longest horizons available. Austria has a 100-year nominal bond – being nominal should make its rate higher due to expected inflation – with yields less than 3%.

Thus the conclusion previewed above: financial markets, as evidenced by real interest rates, are not expecting a high probability of either AI-induced growth acceleration or elevated existential risk, on at least a 30-50 year time horizon.