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>> No.25304541 [View]
File: 393 KB, 756x573, 7 Stages of Wagecel.png [View same] [iqdb] [saucenao] [google]
25304541

>>25303836
Can't find the chart but some bank recently did this analysis where they charted an interest rate of 4% as the peak for consumers' propensity to spend. Low enough to make saving "not worth it" but high enough that the people living off interest (retirees reliant on bonds) don't have to keep hoarding.

So the Fed or ECB or BoJ lower interest rates thinking it will get people to spend, which works from 6% to 5% and 5% to 4%. But below that, as they cut, retirees (and pensions and people in target date funds and...) save *more*, trying to match the interest income they're losing.

This causes inflation to slow even more, prompting the central bank NPCs (or looters, depending on your perspective) to cut more, worsening the cycle. That's why nobody escapes NIRP.

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