What does lower rates change for your investments?

June 24, 2019 by No Comments


The economic theory of interest rates turns out to be fluctuating. Before the 2008 crisis, we learned in schools that central banks set the price of money. To revive a sluggish economy, they had to cut rates and, conversely, when the economy was doing better, to avoid the risk of inflation and overheating, they raised them.

After the financial crisis, Germany imposed strong structural reforms and hoped that this would also be the case in other European countries. The European Central Bank therefore only very belatedly released the pressure on rates in order to irrigate the financial system. The consequence was surprising: not the slightest inflation was the key to this accommodating monetary policy. It’s the start of the limitless party.

The crazy story of negative interest rates (and the puzzle for Lagarde)

Unlike the economic crisis of 2008, the health crisis we are going through is universal in nature. Freed from the risk of inflation, central banks reacted very quickly by injecting massive amounts of liquidity into the global economy. Result: the appearance of in

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