Interest: Interest Rates

interest: Interest rates in the U.S. TMUBMUSD10Y, 1.49% have been declining for over 20 years, and short-term rates have been hovering close to zero over the last decade, according to Market Watch. Negative interest rates in Japan and Europe and mounting expectations of rate cuts by the Federal Reserve have expanded the pool of bonds with negative yields to more than 16 trillion, or around 27% of the global bond market. Low interest rates are going to make it harder for these and other pension plans to rely on investment returns alone to meet their obligations to retirees. Initially, low interest rates are good for asset prices. In addition to stronger economic growth coming out of the 2008 financial crisis, this is one of the factors leading to strong performance of equities SPX, -0.69% over the past decade. Simplistically, this is because investors seeking similar returns as before are now forced to take capital that they would have otherwise invested in safe government bonds and deploy it into riskier assets equities, high yield bonds, etc. thereby driving up prices of these assets. (news.financializer.com). As reported in the news.