29 November 2014

Long Term Interest Rates versus QE

They said that the Fed Reserve was buying bonds and, was thus, being able to keep the rates artificially low.
How come, then, that with the Quantitative Easing ending last month, long term interest rate is still languishing around historical lows? (2.18 %)
And what is more, capital markets are splashing with hitherto unseen liquidity, inspite of an end to the QE, which the intellectuals with degrees and fame feared would dry up once quantitative easing ended.
What if the theory that rates were artificially low, or were made or can be made artificially low by Fed Reserve, is after all, just an intellectual treachery!

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