Larry Summers: Rates will stay lower for longer than you think

Today's FT has an opinion piece of Lawrence Summers:

Real rates in the US will only increase mildly because of the following reasons:

1. Real rates are trending down for 20 years.
2. As rates rise in the US, foreign capital is attracted which will strenghten the dollar and in turn reduces demand for traded goods.
3. Low rates have already pulled demand forward, resulting in lower levels of demand for the future (e.g demand for cars).
4. Regularitory pressure is inhibiting lending to small and medium sized companies.
5. Inflation is getting more difficult to measure as services such as healthcare where quality is hard to measure
6. Most importantly is that global growth outlook is too weak for a rate hike of the usual 300 - 450 basis points. The markets expect a more realistic increase of 100 basis points.

Central bankers have less tools in their cupboard than they assume.