A Quote by Ben Bernanke
Interest rates are used to achieve overall economic stability.
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The key is if the economic data stays soft, maybe we don't have to worry much about interest rates anymore. Then we need to worry about earnings. What gave us a really strong move in stock prices from late May until about two weeks ago was this heightened optimism that maybe interest rates are at that high. That gave you a relief rally. Now reality is setting in - if we've seen the worst on interest rates then we've seen the best on earnings.
If inflation is brought down, interest rates will fall. Once rates fall, we have the opportunity to maybe achieve the goal of 'housing for all' faster; take roads, infrastructure to India's interiors.
The real challenge was to model all the interest rates simultaneously, so you could value something that depended not only on the three-month interest rate, but on other interest rates as well.
In a global marketplace with its increased insecurities and - indeed often - volatility and instability, national economic stability is at a premium, the precondition for all we can achieve, and no nation can secure the high levels of sustainable investment it needs without both monetary and fiscal stability together.
If Republicans are correct that lower rates spur economic growth, then lower rates on all income - made possible in part by raising capital-gains rates - should bolster economic growth across the economy.
It would be helpful if someone would lay out exactly the economic mechanism that gets us from yet lower interest rates to actual economic activity.
When interest rates are high you want the average direction in which interest rates are moving to be downward; when interest rates are low you want the average direction to be upward.
The degree of monetary policy ease should be associated with the level of real interest rates, not nominal interest rates.
Stock price multiples are negatively correlated with real interest rates. As interest rates rise, the market multiple will fall.
And so Fannie Mae produces very strong results for investors in - when interest rates are high and when interest rates are low, in recession and during booms.
A higher IOER rate encourages banks to raise the interest rates they charge, putting upward pressure on market interest rates regardless of the level of reserves in the banking sector. While adjusting the IOER rate is an effective way to move market interest rates when reserves are plentiful, federal funds have generally traded below this rate.
Let's have honest interest rates. Let's let the free market set interest rates in that zone where supply of savings is matched up with demand for real borrowing for capital projects.
To finance deficits, the government must sell bonds to investors, competing for capital that could otherwise be used to invest in stocks or corporate bonds. Government borrowings raise long-term interest rates, stifling economic growth.
Here's the interesting thing: the fact that QE and lowering interest rates almost to zero has worsened inequality, does not mean that raising interest rates will help reduce inequality.
Achieving price stability is not only important in itself, it is also central to attaining the Federal Reserve's other mandate objectives of maximum sustainable employment and moderate long-term interest rates.
What's true for New York is true for most of the country: We are a long way removed from the double-digit interest rates and unemployment rates, and the soaring crime rates, of the early 1980s.
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