Borrowers Benefit, Savers Suffer as Interest Rates Fall; Mixed Blessing for Firms
Federal Reserve Chairman Ben Bernanke has put the financial world on notice: Brace for two more years of rock-bottom interest rates.
That is great news for borrowers, but it promises rough going for anyone seeking returns from fixed-income investments—from retirees to giant pension funds to companies sitting on record amounts of cash.
It has been almost three years since the Fed cut its key rate to almost zero, and on Aug. 9, the central bank said rates are likely to remain there until at least mid-2013. Rates for everything from Treasury bills to money-market funds are near zero. The yield …
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By: Matt Philips
Source: The Wall Street Journal, Aug. 22, 2011
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