"You're, to some extent, limiting nonproductive investments that would not necessarily generate revenue in this high interest rate environment," said Gregory Daco, chief economist at EY-Parthenon. A wave of corporate bankruptcies is rippling through the U.S. But old bets could turn sour, particularly those financed with variable loans that increase alongside the interest rate. ![]() At the same time, low interest rates increase the value of stocks, homes and Wall Street firms that make money by taking on debt.Īs the Fed hikes interest rates, safer bets could end up paying off. ![]() Government bonds, Treasury securities and savings accounts all return very little yield when interest rates are low. Along the way, they disrupted the basic math of personal finance and business in America.įor example, the Fed's unconventional policies helped to sink the profits investors received from safe bets. "Frankly, no one ever thought we'd get to that place."īack-to-back financial crises gave past Fed policymakers the conviction to take interest rates as low as they can go, and keep them there for extended periods of time. "Having interest rates at zero for such a long period of time is very unusual," said Roger Ferguson, a former vice chair at the Federal Reserve. ![]() Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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