We Could Use Some Inflation
The Treasury said this week that it will borrow (and spend) about $3 trillion this quarter, to cover its stimulus promises. Where does that money come from and where...
Interest rates
Fed chairman promises to do ‘whatever it takes’
'A wave of unnecessary insolvencies could do long-term damage to the productive capacity of the economy. That’s a risk,' Fed chairman Jerome Powell (in photo) said Wednesday.
The ‘Fed Put’ Hurts Annuities—and Retirees
Low rates encourage excessive risk-taking. But the Fed keeps accommodating market sell-offs, which sets up a new round of boom and bust. Retirees (and the annuity issuers who serve...
At These Rates, Why Bother to Save?
Negative real interest rates have become a disincentive to personal savings, especially among lower-income Americans who will rely heavily on Social Security and Medicaid anyway, this team of economists...
RIJ Interview: Will Fuller of Lincoln Financial
In the third in our series of interviews with annuity industry leaders, we talk with Lincoln Financial Group executive VP Will Fuller. He was recently honored as an 'Industry...
Rates would be negative without government debt and deficits
'Had real interest rates not gone down over the last half century, savings would have exceeded investment in OECD countries by between 9 and 14 percentage points of GDP,'...
‘Greatest Economy in American History’ still needs Fed help
'Leverage among corporations is historically high. We’re monitoring that and taking appropriate steps,' Fed chair Jerome H. Powell told reporters Wednesday after announcing a third quarter-point hike in the...
Time to Put Benjamins Back in the Sock Drawer?
At the LIMRA annual conference in Boston earlier this week, MIT economist James Poterba described how low interest rates make saving for retirement more of a challenge.
The Seeds of Inflation are Beginning to Sprout
'Trump’s inconsistent trade policies and persistent badgering of Fed Chair Powell and his colleagues has undermined business confidence,' writes our guest columnist, an economist.
Mr. President, Please Stop Tweeting!
'If, as appears, Fed policy is truly being influenced by pressure from Trump, then we will have reckless monetary policy combined with fiscal policy that is out of control,'...
Is Politics Getting to the Fed?
'It is no secret that Trump regards the stock market’s performance as an indicator of his own performance. But it has been surprising to see the Fed join the...
No Need for Lower Rates, but Rate Cuts Likely Anyway
'The Fed’s story is confusing to us. Not only do we think lower rates are unnecessary, they are unlikely to help the Fed achieve its goals. Instead, Trump should...
What Will Fuel The Next Recovery?
'So we are back to facing the same question as in 2016: What to do if stagnation threatens when interest rates are already close to zero? Among the proposed...
Understanding the Fed’s Dovish Turn
'The Fed has had to demonstrate its independence in the face of political pressures. In December, when it signaled further rate hikes, Trump had been calling for a pause,'...
Retail investors reach for income when interest rates fall
A one percentage point drop in the federal funds rate is associated, over the following three years, with a five percent increase in the inflows to stock mutual funds...
Survey shows how advisors generate income for clients
A survey by bond dealer Incapital LLC showed that 51% of financial advisors generate income for clients from dividend-paying stocks, 43% from equity income mutual funds, and 43% from...
Expect a Rocky Return to ‘Normal Valuations’
The Fed's ability to fight the next economic downturn with monetary policy and the federal government's ability to fight it with fiscal policy will both be limited, writes our...
JENGA as a Financial Metaphor
Playing JENGA and watching the interest rate yield curve flatten involve similar degrees of suspense.
Fed raises benchmark rate to range of 1.75% – 2.0%
The last time the rate topped 2% was in late summer 2008, when the economy was contracting and the Fed was cutting rates toward zero.
America’s Exploding Budget Deficit
The U.S. should slow the cost of Social Security by raising the age threshold for receiving full benefits to 70 from 67, recommends Harvard's deficit hawk.
