WSJ's Casey: 'Super-Low Interest Rates Will Be With Us for a Long Time'

Wednesday, 20 Aug 2014 12:19 PM

By Dan Weil

  Comment  |
   Contact Us  |
|  A   A  
  Copy Shortlink
Don't expect interest rates to rise any time soon, because global economic weakness will keep them near record lows, says Michael Casey of The Wall Street Journal.

"It's time to get used to near-zero savings-account interest rates and 10-year [Treasury] bond yields that don't get much higher than 3 percent," he writes.

The 10-year yield hit a one-year low of 2.3 percent last week and stood at 2.42 percent near midday Wednesday.

Editor’s Note:
New Warning - Stocks on Verge of Major Collapse

The Fed may well hike rates as soon as next spring, Casey notes. "But even that won't produce the interest-rate 'normalization' that many assume to be on the way."

The culprit: "banks that remain reluctant to lend to Main Street, a looming debt crisis in China, and the alarming prospect that deflation will come to Europe's shores and return to Japan's," Casey writes.

That will make the Fed reluctant to follow-up its first rate hike with a second one, he argues.

"It isn't hard to imagine that first increase being followed by a six-month or even yearlong hiatus."

The central bank has kept it federal funds rate target at a record low of zero to 0.25 percent since December 2008.

"Super-low interest rates will be with us for a long time," Casey maintains.

Others see low rates ahead too. "The remarkable thing is the persistent decline in long-term Treasury yields," David Bianco, chief U.S. equity strategist at Deutsche Bank, told CNBC.

The 10-year Treasury yield stood at 3.04 percent Dec. 31.

"We're all kind of thinking any significant increase in interest rates is still a while away and increasingly believing long-term interest rates will stay well below historical norms, through the cycle," he said.

Editor’s Note: New Warning - Stocks on Verge of Major Collapse

Related Stories:

© 2014 Moneynews. All rights reserved.

  Comment  |
   Contact Us  |
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
Zip Code:
Privacy: We never share your email.
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

Shiller: Talk of 'Secular Stagnation' May Have Tripped Stock Market

Monday, 20 Oct 2014 20:11 PM

Nobel laureate economist Robert Shiller of Yale says stories about a global slowdown and deflation, which he says add up . . .

Roubini: Global Economic Slowdown May Spill into US

Monday, 20 Oct 2014 19:50 PM

While star economist Nouriel Roubini of NewYork University expects U.S. economic growth to total about 3 percent annuali . . .

Top Fed Officials Come Down Hard on Big Banks

Monday, 20 Oct 2014 18:00 PM

Banks must change the way employees are compensated and take other steps to fix a corporate culture that encourages misd . . .

Most Commented
Top Stories

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved