Currency, Debt, National Budgets & Interest Rates, Finance, Investing, Global Economics, Types of News: Analysis
Central Banks Fuel Stock Market Expansion in 2021
Low-Interest Rate Environment Also Contributing To Rising Cost of Housing
December 30, 2021--With near-zero interest rates by central banks in the United States and Europe, companies raised $12 trillion in 2021 sales of stocks, bonds, and new loans. That's up 17 percent from 2020, according to reporting by the Financial Times.
Low-interest rates make borrowing easier and increase the money supply. The downside is they encourage riskier investments, benefit those who already own assets, and can skew the societal risk toward inflation. In effect, investors benefit while consumers pay more.
Cash to Keep Flowing in 2022
The trend is likely to continue in 2022. Research by J.P. Morgan suggests the U.S. Federal Reserve will continue a "broadly accommodative" policy despite its tape...