How Long Will Interest Rates Stay Low?
0How Long Will Interest Rates Stay Low? After trading around record lows, the 10-year treasury yield rose slightly in the last months, causing a sell-off in tech stocks and other high growth plays. However, the fact remains that the rate is still at historical lows, yielding 1.5% today: Even with such a small bump in the yield, investors are already starting to wonder if this is signifying the end of our low interest rate environment. In general, higher interest rates tend to lower valuations of other assets. Now, even though interest rates recently rose very slightly, we can see the true long-term trend of interest rates put into context by looking at history: Productivity Growth + Population Growth. Productivity growth is being held back due to the astronomical levels of global debt that we keep accruing. One problem with low birth rates is that they decrease the demand for consumer products and services, as there are simply fewer new consumers coming online.