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Low interest rates sound great but can cause a painful ‘sugar high’
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Lower rates tend to stimulate the economy and the stock market, but the effects of lowering them beyond a level that is appropriate for the economy are complicated, and not entirely positive.
ILLUSTRATION: DAN PAGE/NYTIMES
Jeff Sommer
Lower mortgage rates, lower credit card rates, lower business loan rates, you name it. People borrowing money would pay less for it. The economy might boom and the markets soar.
US President Donald Trump has left no doubt that if he gets his way, the Federal Reserve will lower the short-term interest rates that it controls directly. Lower rates tend to stimulate the economy and the stock market, developments that are, not incidentally, good for incumbent presidents and their political parties.
