Lower interest rates may cause more economic pain
With interest rates already extremely low, a further decline will have a negative economic impact via increased market concentration and lower productivity growth
The real (inflation-adjusted) yield on ten-year US treasuries is currently zero, and has been extremely low for most of the past eight years. Outside of the United States, meanwhile, 40 per cent of investment-grade bonds have negative nominal yields. And most recently, the European Central Bank further reduced its deposit rate to -0.5 per cent as part of a new package of economic stimulus measures for the eurozone....
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