Moronic level keeps going lower - US president calls for zero/negative rates (banks, recession)

[homelessinseattle]

Wow that chart goes almost to 2010.

[LordSquidworth]

Originally Posted by Wartrace

What incentive is there for capital to lend at a negative rate? Why would capital PAY to invest? Makes more sense to keep money in a safe.

Half of European government and 20% of their corporate debt is currently negative. Obviously plenty of buyers.

[Lincolnian]

The ECB is ready to cut further and has cited global trade uncertainty and seeing a global slowdown. We are creating our own recession.

[lieqiang]

Originally Posted by homelessinseattle

Wow that chart goes almost to 2010.

You think is significant because there was some spike in interest rates after 2010?

[davebarnes]

Originally Posted by C24L

I wish rates would go up to give us more wiggle room and ammo to deal with the next recession.ugh.

Exactly.

[TwoByFour]

Originally Posted by TimAZ

1) Transaction fees — the more the merrier. 2) Safety - the knowledge that the bond can be sold or redeemed.

You are conflating the overnight rate with the rate for US Treasuries. The two are different. Trump is haranguing the Fed to lower the overnight rate. The rate for US Treasuries is determined by the market. The longer the term is for the security, the less it is affected by the overnight rate. The benchmark US security is the 10-year bond, which is only slightly affected by what the Fed does.

[Mikala43]

Originally Posted by TwoByFour

You are conflating the overnight rate with the rate for US Treasuries. The two are different. Trump is haranguing the Fed to lower the overnight rate. The rate for US Treasuries is determined by the market. The longer the term is for the security, the less it is affected by the overnight rate. The benchmark US security is the 10-year bond, which is only slightly affected by what the Fed does.

Which leads me to ask: What's up with this?

US Overnight Interest Rate Surges to 10%, Fed Injects Emergency $75 Billion

https://moneymaven.io/mishtalk/econo...ECxvWo6Mj-A-A/

[aridon]

Originally Posted by Mikala43

Which leads me to ask: What's up with this?

US Overnight Interest Rate Surges to 10%, Fed Injects Emergency $75 Billion

https://moneymaven.io/mishtalk/econo...ECxvWo6Mj-A-A/

Mostly timing problems due to different maturities on securities, tax payments etc creating a bit of a credit crunch, not enough cash accessibility. Low supply, high demand, price rises. It should become a much bigger issue if it continues.

Rate is supposed to be around 2% and it was over 7%.

You don't want this continuing, much less with year end approaching.

[Mikala43]

Originally Posted by aridon

Mostly timing problems due to different maturities on securities, tax payments etc creating a bit of a credit crunch, not enough cash accessibility. Low supply, high demand, price rises. It should become a much bigger issue if it continues.

Rate is supposed to be around 2% and it was over 7%.

You don't want this continuing, much less with year end approaching.

Thanks! The whole thing was out of my pay grade to figure out how bad it was that it happened.

[mysticaltyger]

Originally Posted by TimAZ

You don’t get it, do you? The central banks are all-in for Modern Monetary Theory. MMT advocates unlimited debt to finance anything. And what is the best interest rate for nations signed up for unlimited debt? Yes, that would be zero or even negative.

Now do you get it?

This is pretty much the crux of it. It's totally insane, but there you have it. People don't understand how fragile the financial system really is.