BRIAN KANTOR: Don’t fight the austere with austerity, rather lower interest rates
Low, postponed demand and a fall in production can become a vicious circle that must be broken
17 October 2019 - 16:06
The developed world is much agitated by very low interest rates. So low that it is hard to imagine them declining further. This is emasculating monetary policy. These interest rates reflect a relative abundance of global savings. Hence inflation (prices rise when demand exceeds available supplies) is confidently expected to remain at very low rates. Interest rates accordingly offer compensation for expected inflation. The US bond market only offers an extra 1.56% per annum for bearing inflation risks over the next 10 years.
The US Treasury Bond Market (10-year yields – daily data) ..
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.