Modern-day slumps in countries with stable political systems are supposed to last for a couple of years, before  policy makers step in to ease financial conditions and return countries to strong and steady expansion. But despite its spurt in mid-2014, we believe the U.S. economy shows little sign that it can go back to the 3 percent-plus average growth it enjoyed before the 2008 crash – without, at least, extremely low interest rates. The slow-flowing river of US economic performance has sparked talk that secular stagnation – a situation of permanently lower growth – is lurking somewhere in the depths.

That talk is probably right. We can no longer blame our problems on a series of unfortunate events that started with the bursting of its housing bubble. Its difficulties are much more profound.

Investors should also understand that the sinister beast of secular stagnation has two heads. The supply head of this hydra – the slow increase in the capacity of the economy to produce – is scary. But we believe it’s the demand head that we should really be nervous about – the possibility that low investment is hitting demand, and hence output and employment.

There is some evidence that the U.S. is beset by secular stagnation of supply. Its productive capacity has ceased to grow fast. Most women have now entered the workforce, four in ten young Americans are college-educated, and the great outsourcing of production to China has run its course. Because these tailwinds no longer exist, the potential growth rate – the speed at which the US economy can expand without stoking inflation, after it’s used up the capacity left idle after the 2008 crash – is a mere 2 or 2.5 percent.

If the US Federal Reserve (Fed) only had to fret about supply stagnation, then you could expect at least one rate rise in 2015, as it acted to prevent demand from outpacing the economy’s rather limited ability to produce.

However, it’s our view that this would be the worst possible thing to do if the Fed is worried about stagnation in demand. This occurs when the desire to save is high and the financial system is in some way impaired leading to money sitting on the sidelines as savings, rather than being invested in the real economy to build factories, hire workers and so on.

There are certainly global forces reducing the incentive to invest in the US economy. The world is awash with savings, from the Eurozone, China and elsewhere. This reduces investment returns, since there is too much money chasing too few opportunities. The growth of the virtual economy is also restricting outlets for investment.

Moreover, we believe the curious behavior of the US economy is consistent with stagnation in demand. Inflation has remained low for decades, despite falling interest rates. Although unemployment has declined, there is considerable “underemployment” – people not able to work as many hours as they want.

There is, therefore, a strong chance that demand stagnation exists. That should be enough to make the Fed concentrate on this hydra head, because the distressing thought is that if the US is stuck in demand stagnation, it will be very hard to get out of it. The conventional way is by cutting interest rates, to make investors take their money out of the bank or government bonds, and invest it in companies instead – but Fed rates are already close to zero. If the Fed raises rates, demand will be damaged even more. That could lead to deflation, which lands economies like the US with high debts, into trouble, since the decline in income makes it harder to pay them.

We believe the Fed probably realizes that demand stagnation is Public Enemy Number One – and that it will respond by keeping rates low for a long time.

What does this mean for investors? Bond yields should remain slim. Low interest rates should support equity prices, by putting a cap on corporate borrowing costs. However, there is not much further for debt yields to drop or equity prices to rise, because values are already at such high levels. We believe the era of out sized returns is over – making good individual security selection all the more important.

Foreign securities are more volatile, harder to price and less liquid than U.S. securities. They are subject to different accounting and regulatory standards, and political and economic risks. These risks may be enhanced in emerging market countries.

Luke Bartholomew is an investment manager within the global macro fixed income team at Aberdeen Asset Management PLC.