5 Reasons Why Excessively Low Rates May be Harmful to the Economy

By: ETFdb
Late last month, the Federal Reserve (Fed) revised its interest rate forecasts due to expectations of faster economic growth, raising its projections for the federal funds rate in 2015 and 2016. The Fed may be anticipating a need to normalize rates sooner than many market watchers expect is good news. Why? In my opinion, excessively low rates may actually be inhibiting U.S. economic growth and job creation in these five unintended ways. Older workers are delaying retirement and staying in the workforce. Excessively low rates are making it expensive for individuals to retire, as potential retirees view investment income generation from fixed income products as too meager to support a reasonable standard of living. As older people are staying in the workforce longer, they’re crowding out younger workers and stunting the job prospects of the young. Companies can’t gauge the true level of U.S. economic growth so they’re holding off […] Click here to read the original article on ETFdb.com. Related Posts: No Related Posts
Late last month, the Federal Reserve (Fed) revised its interest rate forecasts due to expectations of faster economic growth, raising its projections for the federal funds rate in 2015 and 2016. The Fed may be anticipating a need to normalize rates sooner than many market watchers expect is good news. Why? In my opinion, excessively low rates may actually be inhibiting U.S. economic growth and job creation in these five unintended ways. Older workers are delaying retirement and staying in the workforce. Excessively low rates are making it expensive for individuals to retire, as potential retirees view investment income generation from fixed income products as too meager to support a reasonable standard of living. As older people are staying in the workforce longer, they’re crowding out younger workers and stunting the job prospects of the young. Companies can’t gauge the true level of U.S. economic growth so they’re holding off […]

Click here to read the original article on ETFdb.com.

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