Sentences with phrase «explanations of low interest rates»

Yet another critical factor is often overlooked in explanations of low interest rates: a structural rise in risk aversion and savings over the past two decades.

Not exact matches

Three popular explanations are offered to justify the high level of share prices: that profits will grow faster; that the economy and hence equities have become less risky; and that lower, more stable inflation will reduce real interest rates.

Among the explanations that have been put forward are the increased credibility of central banks in controlling inflation (inflation rates remain below 3 per cent across the developed world), the low level of official interest rates in the major economies reflecting low inflation and the continuing weakness in some economies, a glut of savings on world markets particularly sourced from the Asian region, and changes to pension fund rules in some countries which are seen as biasing investments away from equities towards bonds.