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Not all stocks fall. Financials react well to rising rates. When rates rise, that can be a sign for a booming economy, which means government will collect more tax/revenue. And if inflation is high, this means they'll pay less than they borrowed. So real-rates matter. However, many governments (E.g. emerging markets) borrow in USD, and when USD rates rise ...


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It depends how quickly a company/ individual/ country rolls over their debt. Imagine you have a mortgage that has an interest rate that is indexed to fed funds rate, you'll instantly feel the rate increase and you will instantly start trying to balance your books(austerity). Compared to if you have a 20 year fixed mortgage where you don't really care what ...


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Interest rates are determined by supply and demand. There are lots of different interest rates determined in different, but largely inter-related markets each with their own supply and demand. Banks could not loan out an arbitrarily large finite amount of money if reserve requirements were low enough. Many banks are not subject to reserve requirements at all....


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The theory is called Neo-Fisherishm. The Fisher equation states $$r \approx i - \pi_e,$$ where $r$ is the real interest rate, $i$ the nominal, and $\pi_e$ the expected inflation rate. Primary determinants of long-term equilibrium real rates are mostly non-monetary: potential growth rates; demographics; risk preferences in portfolios. Real rates $r$ are ...


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