Are Record Low Yields A Good Thing?
- Author Brenda Taylor
- Published January 19, 2012
- Word count 486
Recently we have seen record low yields on U.S. government treasuries. Currently the 2-Year is trading at a yield of 0.25%. To provide some insight, at the height of the financial crisis in September 2008, when Lehman Brothers filed for bankruptcy, the yield was 2.08%. Even when the stock market reached bottom in March 2009, yields were at 0.93%.
There are a number of reasons for the current low yields in Treasury Bills.
- Flight to Safety
The main reason that we are currently seeing record low yields is based on the fact that there has been a massive "flight to safety" by investors across the globe. Since stock markets started to rise in 2009, many investors still question whether we have seen and are still seeing a rebounding economy. With relatively little improvement in the unemployment rate, vast numbers of previously employed people now not even being counted as unemployed, and little willingness from companies to invest, there is a belief that there are too many dangers to the global economy for companies and individuals to invest in riskier assets.
- Quantitative Easing
The Quantitative Easing programs undertaken by a number of central banks across the globe have had a range of impacts across the various economies. A number of supposed reasons for the programs have ranged from the honorable to the questionable. It has been claimed that the programs have kept interest rates low as the yield on government debt remains at historical lows and low interest rates may encourage companies to invest for the future. The fact that low yields on government debt enables those very governments to continue funding large current account deficits is supposedly meant to be just a coincidence. We will leave it to the reader to decide.
- Government Wishes to Push Investors in to Riskier Assets
Lastly, low interest rates on government debt may hopefully push investors to invest in higher yielding securities such as stocks, which would again benefit companies who are looking to expand and take on more staff.
These facets of the economy are currently being studied by students in accounting and finance in various universities across the world.
Would You Like To Study a Master’s in Finance?
A Master of Finance degree is a rewarding qualification where individuals who attain the level often gain a place in large financial institutions. Governments often rely on large financial institutions to provide analysis on the economy and the institutions have a large amount of lobbying power over the government. If you achieved a job with one of these financial companies, you could be responsible for molding the environment for economic growth in the future. If you would be interested in working for a large financial company you should consider completing an online Master's in Finance degree. By studying a Master’s in Finance you would be equipped with the knowledge to join the financial elite and make decisions that would shape the future economy.
Brenda Taylor is a freelance education writer who has worked with a number of education companies. Find out more about studying a Master's in Finance degree.
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- The Art of Coaching: Cultivating Growth and Inspiration
- Creating a Holistic Backyard Retreat: Old World Elegance Meets Nature
- Understanding T1 and T2 Transit Documents in EU: Your Complete Guide
- Cryptonews.money: Your Ultimate Guide to Understanding Cryptocurrency
- 15 Basketball Dribbling Games and Passing Drills for Better Ball Handling
- Transdermal Progesterone Cream: Benefits for Hot Flashes and Menopause Symptoms
- Tepezcohuite: The Ancient Skin Health Secret You Need to Know
- Quiet Cars and Busy Calendars: The Overlooked Role of Chauffeurs in Post-July Corporate Travel
- 1031 Exchange
- Breaking Karmic Cycles, Creating a Shiva Altar with Deity Carvings and Sculptures from Mogul Interior
- The Art of Whimsical Carved Wall Art & Eclectic Décor
- “Hellfire and Heresy: Ken Russell’s The Devils and the Fury of Sacred Cinema.”
- Transform Your Bedroom into a Productive Haven: Ultimate Guide to Bedroom Inspirations with Desk
- “Heatwave: When Crime, Character, and Two Legends Collided in Michael Mann’s L.A.”
- Steam Vs. Scrub: The Best Chemical-Free Tools For Cleaning Tile Edges And Grout
- A Smart Solution for Clean Environments: Hygienic PVC Wall Cladding
- Choosing the Right Stainless Steel Panel Adhesive for Durable Wall Cladding Installations
- How to Choose the Right PVC Panel Adhesive for a Professional Finish
- Precision Finishing with Steel Cladding Profiles and Trims
- The Finishing Touch: PVC Cladding Trim & Profiles for a Seamless Installation
- Lightweight Strength: Why Aluminum Cladding Sheets Are a Smart Choice for Modern Projects
- Durable and Hygienic: Why Stainless Steel Wall Cladding is the Industry Standard
- Transform Your Interiors with PVC Ceiling Panels and Planks
- Enhance Hygiene and Style with BIOMAX Coloured Hygienic Wall Cladding
- Add Vibrancy and Protection with PVC Colour Wall Cladding
- Superior Protection with Antimicrobial PVC Wall Sheets
- The Versatile Power of White Hygienic Wall Cladding Sheets
- Affordable Quality – Cheap Hygienic Wall Cladding That Doesn’t Compromise Standards
- Hygienic Panels and Hygiene Cladding – A Must-Have for Modern Commercial Spaces
- Why PVC Cladding Sheets Are the Gold Standard in Hygienic Cladding