Why are US Savings Bonds interest rates low? (bond, invest, loan)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
The bonds are effectively the loaning of money to the American people, and just like you want the the lowest interest rate on your car loan or mortgage, the American people intend to pay the lowest interest rate for which there are folks willing to loan the government money at that rate.
Is the idea, to discourage people from buying them so they will buy other things?
My folks bought me a bond in the early 90s. The interest rate was very high. It keeps me from dumpster diving now.
To spur growth, the best thing the government can do is to keep interest rates low. This encourages business to use this time to expand. This encourages people to buy and invest in real estate. This encourages people to buy a new car. ETC
if interest rates were much higher the US may not be able to pay the interest on the $17 trillion dollar national debt.
Today there was an interest rate move on the 10 year.
The market can force rates up.
it also goes by what rates are in other countries who compete for investment dollars. world rates are low all over in developed countries. not so back in the 1990's.
Is the idea, to discourage people from buying them so they will buy other things?
You're on to them! Yes, they want to force everybody into the stock market so they can grab it all. They haven't had a good haul since 2008.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.