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Page added on August 18, 2016
The effects of negative interest rates on markets, economies and more
Central banks’ implementation of negative policy rates is at an unprecedented scale, reflecting both the limits of previous unconventional monetary policies and a general inability to utilize fiscal stimulus to jump start economic growth. However, this extreme policy approach will have consequences, both intended and unintended, for markets, macroeconomic balances, investors, consumers, and policymakers.
We draw on the strength of our deep global analytic bench to provide commentary and insights that investors can harness as they strive to navigate and profit in this unchartered environment.
Download a full article on negative interest rates by S&P Global analysts and economists across the company, as well as watch videos delving into the logic and limits of negative interest rate policy and weighing the pluses and minuses on negative interest rates.
9 Comments on "The effects of negative interest rates on markets, economies and more"
HARM on Thu, 18th Aug 2016 11:17 am
Negative interest rates are just one example (and consequence) of the impossibility of endless growth. They will not be the last.
Davy on Thu, 18th Aug 2016 12:25 pm
Negative rates is the consequences of extend and pretend and they are the train to worse to come.
Survivalist on Thu, 18th Aug 2016 6:12 pm
Real people don’t put money in the bank at negative interest rates. They buy a safe. The only entity buying negative interest rate treasury bonds from a nation state’s government is that own nation states central bank/federal reserve. So the fed prints money and buys treasuries from the gov. It’s a bullshit move. It’s a bulkshit story. All these Austraian economist types bitching how negative interest rates are s problem should perhaps explain their recommended alternative. Let’s try 8% and see what that does for the economy.
Davy on Thu, 18th Aug 2016 6:44 pm
Real people put money in the bank and they have safes. Banks are a tool and even when they used to pay interest it wasn’t worth the investment. Banks serve a purpose as a tool of involving money. They are relatively safe if you don’t put your whole nest egg in them.
Cloggie on Thu, 18th Aug 2016 7:11 pm
Negative interests are a sign that the banks no longer can find sufficient profitable investments.
makati1 on Thu, 18th Aug 2016 7:15 pm
Clogie, BINGO! Right on.
makati1 on Thu, 18th Aug 2016 7:19 pm
Survivalist, you are correct. There is no reason to have more money in an account than is necessary to keep it open for your use. Unfortunately, you need a bank for much of today’s money transactions and large purchases requiring loans. Most banks are not solvent, as will be obvious as the future unfolds. Credit cards should be replaced with debit cards, if you really want to control your spending.
joe on Thu, 18th Aug 2016 10:52 pm
This is an inflation story. Banks buying bonds with negative rates on them will stand to gain massively if inflation rises. They will be poison to those who own them when they mature. Who will want to own a bond which pays zero interest on maturity? National bonds are trading as junk and rating agencies and the media are giving this sh1t gold star ratings, its a big scam designed to keep the party going a few years longer. Modern politics merely reflects that in the monumentally historic years of 2007/08, global captialism imploded and nation states emerged as the great benefactor, litterally giving former capitalists a blank check to keep pretending everything was ok. Rates are going down because people can see the writing on the wall.
penury on Fri, 19th Aug 2016 11:32 am
As of two days ago, govt bonds carrying negative interest rates equaled 15 trillion dollar value. Some may question who would buy negative interest rate bonds? Easy peasy, CBs buy with made up currency and then pay large banks to take the bonds, after a number of years the bonds no longer have value(?) so are written off. Aren’t your masters really smart?