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Several studies show that the expansionary effect of lower interest rates has often outweighed the contractionary effect of lower government spending.
ECONOMIST: Tightening economic policy
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The Fed talks about the stimulative effect of lower interest rates created by their purchases, but there is apparently no mention that higher inflation, when it occurs, would increase interest rates.
FORBES: A Respite For Deflation
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These higher yields equate to lower bond prices which, in effect, wipe out years of interest, considering there is an inverse relationship between price and yield.
FORBES: Quantum Physics And The Economy - How the Bond Market 'Bubble' Affects the Overall Global Economy
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The Federal Reserve, with Chairman Ben Bernanke at the helm, has tried desperately to prop up the economy, introducing two programs of quantitative easing, or long-term asset purchases designed to lower interest rates, spark a wealth effect, and alter expectations.
FORBES: 'No Real Hope In Sight' As Case-Shiller Shows Housing Recession Still Here