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NSFW- Trump calls for US interest rates to be "zero, or less"

r2d2

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r2d2 LEGEND

r2d2

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The Federal Reserve should cut US interest rates to "zero, or less," said President Donald Trump in a tweet this morning. Lower rates would give the country the chance to refinance its debt pile at lower rates, Trump said.

Dumb question:

Less than zero ante?????  $100 loan theesukoni $90 repay cheste saripodda???

^^

 

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Hitman LEGEND

Hitman

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9 minutes ago, r2d2 said:

 

 

The Federal Reserve should cut US interest rates to "zero, or less," said President Donald Trump in a tweet this morning. Lower rates would give the country the chance to refinance its debt pile at lower rates, Trump said.

Dumb question:

Less than zero ante?????  $100 loan theesukoni $90 repay cheste saripodda???

aa heading choodagane naaku kooda same doubt vachindi... if not like you mentioned, may be banks will pay interest for debtors. @~`

^^

 

 

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r2d2 LEGEND

r2d2

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How do negative interest rates work? 

Interest rates are established by central banks and flow down to commercial banks and other financial institutions. Central banks set a benchmark range for borrowing costs, and commercial banks then take direction from that range to set rates for savings accounts, mortgages, and loans. 

Typically, commercial banks will pay account-holders a small interest rate for storing their money with the bank. With negative interest rates, account holders get charged a nominal rate instead, so they lose money by keeping it in the bank.

The idea behind negative interest rates on savings accounts is to encourage people to spend. If savers have to pay for their money to be stored, ideally they'll be more likely to spend it instead. 

But negative interest rates don't just affect savers — they also affect how governments issue debt. Central banks around the world have dragged down bond yields by keeping interest rates historically low. 

Bonds have a negative yield when the total amount of interest an investor receives over the life of the bond is less than the premium they paid for it. Investors who purchase bonds with a negative yield and hold them to maturity end up losing money on their investment.

In the event that they need a safe place to park their capital when other investment vehicles — like stocks — become too volatile, they become more willing to do so.

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