The Upshot of ZIRP

Let's look at the Federal Reserve's zero interest rate policy, or ZIRP. Today's artificially low interest rates are the result of the Fed buying about 80% of all new Treasury securities issued. The Fed's interference with the normal auction process is unlikely to end voluntarily. With more than $16 trillion in national debt outstanding, a reversion to more normalized 5% to 6% coupon rates on 30-year Treasury bonds would make America's debt service costs unsustainable.

So, what is the big takeaway in knowing that interest rates will remain near record low levels?...192 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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