Fannie Mae has never publicly disclosed how much money it could lose if interest rates rose 1.5 percentage points in a very short period of time.
Alex Berenson
Rising interest rates are considered bad for stocks because they raise the cost of doing business and depress corporate earnings and because higher yields make bonds relatively more attractive than stocks to investors.
Lower interest rates are usually considered good for stocks because they lower the cost of borrowing and make bonds a less attractive alternative investment.
It's one of the fundamental principles of the stock market: When interest rates go up, stocks go down. And along with financial companies and cyclicals, technology companies - with their sky-high price-to-earnings multiples - should be among the biggest losers in an environment of rising rates.
To finance deficits, the government must sell bonds to investors, competing for capital that could otherwise be used to invest in stocks or corporate bonds. Government borrowings raise long-term interest rates, stifling economic growth.
Business cycles lengthened greatly during the 20th century, as central banks learned to manage national economies by raising and lowering interest rates.
It has been said that the Fed's job is to take the punch bowl away just as the party gets going, raising interest rates when the economy is growing too fast and inflation threatens.
The Fed's ability to raise and lower short-term interest rates is its primary control over the economy.
To investors, job creation is a second-order effect. Market participants care first about interest rates, exchange rates, bond prices and the one great factor that affects all three: the long-term solvency of a bond company called the U.S. government.
Amity Shlaes
The greatest economic power might in fact remain in the hands of the Federal Reserve. Economists credit the Fed's policy of keeping interest rates at historic lows with helping to pump up the economy and bring unemployment down.
Andrew Ross Sorkin
Eurobonds are absolutely wrong. In order to bring about common interest rates, you need similar competitiveness levels, similar budget situations. You don't get them by collectivizing debts.
Angela Merkel
After the accession to the euro zone, interest rates declined substantially in Portugal.
Anibal Cavaco Silva
For people who grew up in the last four decades of the 20th century, it is hard to grasp the concept of negative interest rates. How is it even possible? If interest rates are the price of money, is the marketplace broadcasting that money is on sale? Are we just giving it away?
Anthony Scaramucci
Demonetisation is a disinflationary process. So, this will bring down prices in the long run. It will also help in bringing down interest rates.
Arundhati Bhattacharya
You cannot take bank interest rates very sharply down: you will lose your deposit franchise.
When interest rates are coming down, you cannot have high margins.
The degree of monetary policy ease should be associated with the level of real interest rates, not nominal interest rates.
Athanasios Orphanides
Stronger regulation and supervision aimed at problems with underwriting practices and lenders' risk management would have been a more effective and surgical approach to constraining the housing bubble than a general increase in interest rates.
Ben Bernanke
Interest rates are used to achieve overall economic stability.
Achieving price stability is not only important in itself, it is also central to attaining the Federal Reserve's other mandate objectives of maximum sustainable employment and moderate long-term interest rates.
The crisis and recession have led to very low interest rates, it is true, but these events have also destroyed jobs, hamstrung economic growth and led to sharp declines in the values of many homes and businesses.
Monetary policy has less room to maneuver when interest rates are close to zero, while expansionary fiscal policy is likely both more effective and less costly in terms of increased debt burden when interest rates are pinned at low levels.
And that's the one thing that people do not understand is that we have very low interest rates and if those go back to historical levels or even go back to scary thoughts that they're back in the late '70s, early '80s, then that's going to really be hard to actually pay off those debts. It's going to be a - it's going to be a very big problem.
Former Senator Al D'Amato in 1991 offered an amendment to cap credit card interest rates at 14 percent.
If you put tariffs in place, it creates inflation. If you put inflation in place, you have to raise interest rates. You raise interest rates, and stock markets shouldn't be so high.
It's sort of like a teeter-totter; when interest rates go down, prices go up.
I can't tell you how much debt I took on to attend New York University because, at the time, I didn't care to notice. And besides, what teenager has a clue about interest rates? What I can tell you is that by my mid-20s, I owed somewhere around $50,000.
Low interest rates are a big opportunity for investment. But the issue is that this money should go to the real economy, not the financial economy.
Nobody likes high interest rates.
If we were to underrun our inflation objective over a period of time that we tried to increase interest rates, I think that would be worrisome.
Negative interest rates have been employed by many, many central banks.
I would also certainly continue to keep loan repayment interest rates as low as possible. And I would spread the financial aid a little less thinly across all income brackets.
Every loan that we did in the City of Detroit in the 10 years they studied - between 2005 and 2014 - were conventional FHA, VA loans with average interest rates of 6%.
On average, an underserved consumer spends 10% of their disposable income on unnecessary fees and interest rates.
I think the millions of people who had been able to renegotiate their mortgages so they are paying lower interest rates are better off.
I mean, I'm a conservative. I believe that, you know, if you borrow too much, you just build up debts for your children to pay off. You put pressure on interest rates. You put at risk your economy. That's the case in Britain. We're not a reserve currency, so we need to get on and deal with this issue.
People 'demand' the opportunity to gamble away money they do not have, just like people 'demand' money from loan sharks at extortionate interest rates. This is a warped, empty type of freedom, in which the powerful are free to exploit the vulnerable.
The Fed should make a clear commitment to stable money to reduce the swings in interest rates and inflation. Instead, it champions and flaunts unstable money. This encourages momentum trading and the growth of derivatives. Meanwhile, layers of financial regulation make Washington bigger and more powerful but don't fix the underlying problems.
To pump up consumer or government demand would force interest rates up and asset prices down, possibly by enough to destroy more jobs than are created.
Families rely on financial services more than ever, but those who need them most - who struggle to make ends meet - too often must contend with sky-high interest rates and tricks and traps buried in the fine print of their loan products.
Homeowners refinance their loans when interest rates go down. Businesses refinance their loans.
And so the danger for the housing industry is if we see interest rates rise.
And so Fannie Mae produces very strong results for investors in - when interest rates are high and when interest rates are low, in recession and during booms.
Well, you know, we've got a lot of stimulus in the economy already from the tax cut, from the lowered interest rates, and also from the refinancing of mortgages.
Despite the deep reforms we are making, traders and speculators have forced interest rates on Greek bonds to record highs.
When people retire, their income drops much more sharply than their consumption. As a result, they stop saving and start drawing down the assets they've acquired during their high-saving years. That could start to put upward pressure on interest rates and downward pressure on stock prices.
Low interest rates are usually attributed to low inflation, weak economic growth and super easy monetary policy. But there's another deep-seated factor that doesn't get much attention: demographics.
Dead-low interest rates are great for stocks. They don't run up, they creep up.
Of course, looking tough on inflation is part of any central banker's job description: if investors believe that inflation is going to get out of control, you end up with higher interest rates and capital flight, and a vicious circle quickly ensues.
If you're making all your money simply betting on interest rates, that's not a business. Flow is a business. On the outside, they look the same for a while. But when you dig into them, no, they weren't exactly the same.
