4 ms·
'artificially low' What do you think the natural rate of interest should be? Why?
by jacobion 6y ago
'artificially low'
What do you think the natural rate of interest should be? Why?
- jcbrand 6y agoI don't need to know what the natural rate would be to know that the current rate is artificially low. Central banks drive down the rates by buying government debt that would otherwise have to be sold to the rest of the market. They're therefore adding a massive amount of demand for the debt, thereby pushing up the price (and reducing the interest).