He has cut short term interest rates to the bone.

The Bush administration cut taxes. The Fed cut interest rates in response to the 2001 recession.

Interest rates were cut by presidential decree to below the inflation rate.

The United States, Canada, and the United Kingdom all have cut interest rates recently.

The same may happen in Europe, especially given the ECB s refusal to cut interest rates.

This is not to argue, of course, that the ECB should cut interest rates now.

Interest Rates

When the Canadian dollar sharply appreciated, the Bank of Canada did more than talk it cut interest rates.

When Interest Rates Rise

But then the NASDAQ index fell 22 over the following year, although the Fed continued to cut interest rates aggressively.

In the last month alone, Australia, India, Mexico, and others have cut interest rates. China has reduced reserve requirements on banks.

The Trouble With Interest Rates

Interest rates are already low.

But real interest rates did not fall enough, because nominal interest rates cannot go below zero.

With Treasury yields spiking and economic activity collapsing, the Fed would want to cut interest rates and flood the markets with liquidity.

This decrease reflected the continuous cut in short term interest rates by central banks worldwide, which dropped to a 45 year low.

East Asian countries were told to raise their interest rates, in some cases to 25 , 40 , or higher, causing a rash of defaults. In the current crisis, the US Federal Reserve and the European Central Bank cut interest rates.

Interest rates were slashed, insolvent banks were bailed out, the printing presses were turned on, taxes were cut, and public spending was boosted.

But soaring deficits did not return the economy to full employment, so the Fed did what it had to do cut interest rates.

The ECB will have to cut interest rates in 2008 if it wants to avoid a hard landing for the euro zone economy.

Slow Growth for US Interest Rates

Bondholders gain when interest rates fall.

Yet international interest rates are rising.

Central banks respond to lowered demand by reducing interest rates and to higher expected inflation by raising interest rates.

This means that real interest rates interest rates measured in terms of goods and services have stayed the same.

Of course, if interest rates also were being cut in the euro zone, the fall in the dollar against the euro would be moderated.

In view of the present slow growth in the region, some analysts are calling for a cut in interest rates but many expect the European Central Bank to start raising interest rates to a more neutral level towards the end of 2005.

US Interest Rates Will Continue to Rise

The Long Mystery of Low Interest Rates

Low interest rates caused a housing bubble.

With Sarkozy off his back, ECB President Jean Claude Trichet might feel freer to cut interest rates to counter the impending economic slowdown in Europe.

6. Use of selective nominal interest rates in such a way that interest rates on loans for speculative activities would be greater than the rates on loans for productive activities, and resulting weighted real interest rates for savings would be positive.

For example, sustained low interest rates hurt savers who traditionally prefer safe short term investments. Pensioners and those near retirement, facing low income from interest, may cut back further on consumption, weakening the economy.

The currencies of the reform laggards would have depreciated against that of Germany, and there might have been a supportive cut in interest rates as well.

Do Low Interest Rates Ensure High Asset Prices?

Interest rates on government debt are still low.

Mortgages are available at outrageously high interest rates.

Interest rates on government bonds were racing upward.

In Brazil, interest rates remain close to 11 .

Both were reluctant to lower interest rates markedly.

Low interest rates did not cause the bubbles.

Remarkably, as short term interest rates rose, medium and long term interest rates did not, something that was referred to as a conundrum.

An expectation that interest rates will be high sometime in the next decade should mean high interest rates on long term bonds today.

Interest rates, or interest on your mortgage, or how much interest do I owe on my credit card.

Eventually, lower commodity prices and lower inflation will act like a huge tax cut for households, allowing interest rates to fall further and thus stabilize economic activity.