> Not for nothing, but why can’t the Fed just keep the base interest rates low forever?
Low interest rates are basically propping up the finance industry. The cheap money that banks can borrow from the Fed is not going to end up at yours truly, it will only end up in investment shenanigans. In addition, low interest rates also kill savings for poor(er) people - this is something that's a real problem in the European Union right now. Banks offer their customers sometimes negative rates on their savings, and no "conventional" savings accounts hit even inflation percentages which means both poor people and "rich-ish" (=not poor, not rich enough to be able to risk money on the stock markets, but rich enough that their banks charge negative interest) effectively lose money.
I didn't think negative rates hit "consumer" accounts yet? Just Government issued bonds and "institutional" instruments. But my data is about ~18 months old.
Low interest rates are basically propping up the finance industry. The cheap money that banks can borrow from the Fed is not going to end up at yours truly, it will only end up in investment shenanigans. In addition, low interest rates also kill savings for poor(er) people - this is something that's a real problem in the European Union right now. Banks offer their customers sometimes negative rates on their savings, and no "conventional" savings accounts hit even inflation percentages which means both poor people and "rich-ish" (=not poor, not rich enough to be able to risk money on the stock markets, but rich enough that their banks charge negative interest) effectively lose money.