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.
There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.
Already a Subscriber? Please login.
