Low rate of interest personal loan

 

low rate of interest personal loan

This sounds very textbook-y, but failure to understand this point has led to some confused critiques of Fed policy. When I was chairman, more than one legislator accused me and my colleagues on the Fed’s policy-setting Federal Open Market Committee of “throwing seniors under the bus” (to use the words of one senator) by keeping interest rates low. The legislators were concerned about retirees living off their savings and able to obtain only very low rates of return on those savings.

The state of the economy, not the Fed, is the ultimate determinant of the sustainable level of real returns. This helps explain why real interest rates are low throughout the industrialized world, not just in the United States. What features of the economic landscape are the ultimate sources of today’s low real rates? I’ll tackle that in later posts.

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Author Ben S. Bernanke Distinguished Fellow in Residence - Economic Studies Twitter BenBernanke

Low rate of interest personal loan

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This sounds very textbook-y, but failure to understand this point has led to some confused critiques of Fed policy. When I was chairman, more than one legislator accused me and my colleagues on the Fed’s policy-setting Federal Open Market Committee of “throwing seniors under the bus” (to use the words of one senator) by keeping interest rates low. The legislators were concerned about retirees living off their savings and able to obtain only very low rates of return on those savings.

The state of the economy, not the Fed, is the ultimate determinant of the sustainable level of real returns. This helps explain why real interest rates are low throughout the industrialized world, not just in the United States. What features of the economic landscape are the ultimate sources of today’s low real rates? I’ll tackle that in later posts.

Comments are now closed for this post.

Author Ben S. Bernanke Distinguished Fellow in Residence - Economic Studies Twitter BenBernanke

Monetary policy committee member Gertjan Vlieghe says debt, demographics and distribution of income could all depress interest rates for years to come

Monetary policy committee member Gertjan Vlieghe says debt, demographics and distribution of income could all depress interest rates for years to come

The prospect of ultra-low interest rates persisting for years to come has been conjured up by a leading Bank of England policymaker after a further fall in oil prices and shares in London sinking to their lowest level since late 2012.

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If you have lower back pain, you are not alone. About 80 percent of adults experience low back pain at some point in their lifetimes. It is the most common cause of job-related disability and a leading contributor to missed work days. In a large survey, more than a quarter of adults reported experiencing low back pain during the past 3 months.

Summary: Lower interest rates make it cheaper to borrow. This tends to encourage spending and investment. This leads to higher aggregate demand (AD) and economic growth. This increase in AD may also cause inflationary pressures.

Overall, lower interest rates should cause a rise in Aggregate Demand (AD) = C + I + G + X – M. Lower interest rates help increase (C), (I) and (X-M)

If lower interest rates cause a rise in AD, then it will lead to an increase in real GDP (higher rate of economic growth) and an increase in the inflation rate.