What affect would negative interest rates in the U.S. have on investors?

BACK TO INSIGHTS

As published in “Financial Focus – Down The Rabbit Hole” in the summer 2016 issue of Pittsburgh Quarterly magazine.

What affect would negative interest rates in the U.S. have on investors?

Potential Impact of Negative Interest Rates

An often-misattributed quote is, “compound interest is the greatest invention of mankind.” Whoever deserves credit for the quote would turn in their grave at the idea of negative interest rates. The consequences of negative interest rates cannot be fully known, but they would certainly pervert the natural order of investing. Savings would be punished and borrowing (debt) would be rewarded.

Negative interest rates would certainly help governments that have a great deal of debt, making it cheaper to finance their deficits. The thought is, negative rates would also spur the consumer to spend instead of save. I believe that individuals will still want to save. Negative rates will just force them to do it outside of the traditional banking system. My hope is that we do not experiment with a negative interest rate policy.

Mike Kauffelt
Chief Investment Officer
Bill Few Associates, Inc.

 

Pittsburgh’s Premier Financial Advisors

Bill Few Associates, Inc. — an independent, fee-based wealth management firm — provides comprehensive financial planning and investment management services for individuals and businesses. Our financial advisors offer counseling on a wide range of services: investment management, retirement planning, estate planning, insurance planning, and education planning. Supporting our financial advisors are experienced portfolio managers and market analysts.

Contact Michael K. Kauffelt, II, CFA

North Hills Address
107 Mt. Nebo Pointe
Suite 200
Pittsburgh, PA 15237
South Hills Address
740 Washington Road
Mt. Lebanon, PA 15228

Quick Links

At Bill Few Associates, we offer a wide range of financial planning services tailored just for you.

For a no-obligation consultation

Contact Us