Zero Interest Rates ‘Til 2022! šŸ©

Zero Interest Rates ‘Til 2022!

The Federal Reserve has committed to more of the same. Itā€™s keeping interest rates at zero for another two years, the money printers going brrr, and now thereā€™s set to be three more emergency lending programs launched in addition to the nine currently. These are the big guns!

Federal Reserve Chairman Jerome Powell is an economic bear taking matters into his own hands. The former lawyer has maxed out his economic policies while warning investors about coronavirus damages that wonā€™t patch up fast, no matter what stock market surges may suggest.

His recessionary harpoon is zero interest rates, which mean a near-zero cost of borrowing for entrepreneurs and business owners. The cheap debt should stimulate risk-taking and lift sentiment, while quantitative easing (QE) focuses on supporting the stock market.

Quantitative easing means digital money printing, done when the Fed buys bonds and bids up bond prices to stifle their value for money. It forces investors to switch to stocks instead, but itā€™s not real value created. QE gives the stock market a facelift, but it risks some bond investors ā€˜reaching for yieldā€™ in a ā€˜dash for trashā€™ into extremely risky debt.

It wouldā€™ve been shocking for Jerome Powell to announce a rate hike, but a two-year pledge to keep rates rock-bottom is also a surprise. If the stock market experiences a big pullback, perhaps thereā€™s a second wave, rates will have nowhere to go but sub-zero.

Stocks are in a world of zero-gravity; we better get used to it!

Share:

More Posts

What is a kids brokerage account?

23 March, 2023

A kid’s brokerage account is more accurately called a custodial account. This is a brokerage account that parents or legal guardians can open on behalf of their child.

Load More
Get your daily Invstr Crunch

Get the market news and updates you need, delivered to your inbox or available on our daily podcast.

Facebook Twitter Youtube Instagram Snapchat Tiktok
learn
products
plan
Who we are
blog

Risk Disclosure:

Invstr is not a bank and banking services are provided by Vast Bank, N.A.

Brokerage and Banking services are currently only available to U.S. residents.

Invstr app and web services are provided by Invstr Ltd. Advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC) details of which can be obtained here. Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value.

Investing involves risk and can lead to losses. Past performance does not guarantee future results.

Invstr app and web services are provided by Invstr Ltd. Invstr+ advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC). Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value. Vast Bank N.A. a nationally chartered bank and member of the FDIC, provides the banking products, including the products and services related to digital asset accounts. As with any asset, the value of Digital assets can go up or down and there can be a substantial risk that you lose money buying or holding digital assets. You should carefully consider whether trading or holding Digital assets is suitable for you in light of your financial condition. Your digital account does not support wallet to wallet transferring of your digital assets (i.e. cryptocurrencies) outside the platform. Any Digital Assets in your digital asset account are not insured by any government entities, including but not limited to FDIC or SIPC. The Invstr VisaĀ® Debit Card is issued by Vast Bank, N.A. pursuant to a license from Visa U.S.A Inc and may be used everywhere Visa debit cards are accepted. Invstr Ltd, Invstr Financial LLC and Invstr Securities Ltd are subsidiaries of Marketspringpad Holdings (collectively “Invstr”) and Invstr is solely responsible for the application services and website content.

Watchlists provided when users first access the service are not a recommendation to invest. Instead they are provided to help users better navigate the service. Users are free to edit and create their own watchlists. From time to time, Invstr will suggest instruments solely based on an individual’s interest and the interest levels of the Invstr community.The statistical and portfolio builder models generated by Invstr do not reflect actual investment results and are not guarantees of future results.Comments provided by Invstr leaders, influencers or members of the Invstr Community are not recommendations and should not be construed as such.Invstr does not endorse the content or the positions posted by them. Their investment approach, and that of the models provided by Invstr, may be different from yours and may not be appropriate for you.