I didnt know it but the prime rate has been steady for a long time

[shortylickens]

http://www.moneycafe.com/personal-finance/prime-rate/


And super low. Thats good for the little man, but how does it fare for the whole country including businesses?

 

[jpiniero]

Well, the Fed Rate has been basically zero for some time now. Super low isn't all that for the little man; esp since to get any kind of yield, people have had to switch to risky investments, which in turn has caused this massive bubble in the stock and bond markets.

 

[JEDI]

heloc = prime - 1% = 2.25%

took it out and put all $100k into Chipolte 2yrs ago
Like a BOSS

 

[mikeford]

http://www.moneycafe.com/personal-finance/prime-rate/


And super low. Thats good for the little man, but how does it fare for the whole country including businesses?

Royally screwed a LOT of retired people who kept all or most of their retirement funds in "safe" interest bearing investments.

Next big hit is when rates eventually rise and the amount we pay on the national debt goes through the roof, Tbills start paying 5% instead of less than 1%, and we have real budget crisis.

 

[jpiniero]

Next big hit is when rates eventually rise and the amount we pay on the national debt goes through the roof, Tbills start paying 5% instead of less than 1%, and we have real budget crisis.

They won't increase it that much, and the deficit is a big reason why. They are only going to raise rates to pop the bubble because they realize they overdid it.

 

[IronWing]

The low rates suck if you have no debts. Savers are getting interest rates below inflation, subsidizing the spendthrifts.

 

[jlee]

The low rates suck if you have no debts. Savers are getting interest rates below inflation, subsidizing the spendthrifts.

It was a convenient time to buy a house, though

 

[Leyawiin]

Royally screwed a LOT of retired people who kept all or most of their retirement funds in "safe" interest bearing investments.

Yeah, my mom being one. She's not interested in playing the stock market and its not even funny the paltry amount of money she gets from her CDs (and has about 700K tied up in them). I offered to help her find better options, but she won't budge on the "safe" aspect. A lot of people of her generation just aren't comfortable with any risk. In the last eight years she's seen it go down from 4.5% (tolerable) to 2.5% (ridiculous). In two more years they mature again and right now the rates stand at 1.65%. Sucks.

 

[brianmanahan]

The low rates suck if you have no debts. Savers are getting interest rates below inflation, subsidizing the spendthrifts.

the stock market returns have more than compensated for the low interest rate savings and bond returns over the past 5 years

will they in the future though?

results hazy, ask again in 10 years