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Three Reasons Interest Rates Could Stay Low, and What This Means for Portfolios
October 28, 2014 at 19:00 PM EDT
If you are in or near retirement, you know it’s been hard earning income on your investments in recent years. Unfortunately, I don’t see it getting much easier in the next few years. I expect the 10-year Treasury yield to finish the year between 2.5% and 2.75% and to trend higher to 3% over the intermediate term. However, while I do expect long-term rates in the United States to climb modestly in the near future, interest rates are likely to remain historically low for an extended period of time. In my latest Market Perspectives paper, Under Pressure: Why Interest Rates Could Stay Low for a Long Time, I examine three reasons that play into this conundrum. Slow growth and no inflation. Long-term rates tend to correlate with nominal growth (inflation plus real growth) which has been below trend since 2000. I believe that the deceleration in nominal growth has mostly been driven by secular […] Click here to read the original article on ETFdb.com. Related Posts: No Related Posts
If you are in or near retirement, you know it’s been hard earning income on your investments in recent years. Unfortunately, I don’t see it getting much easier in the next few years. I expect the 10-year Treasury yield to finish the year between 2.5% and 2.75% and to trend higher to 3% over the intermediate term. However, while I do expect long-term rates in the United States to climb modestly in the near future, interest rates are likely to remain historically low for an extended period of time. In my latest Market Perspectives paper, Under Pressure: Why Interest Rates Could Stay Low for a Long Time, I examine three reasons that play into this conundrum. Slow growth and no inflation. Long-term rates tend to correlate with nominal growth (inflation plus real growth) which has been below trend since 2000. I believe that the deceleration in nominal growth has mostly been driven by secular […]
