Summary of QE and Ultra-Low Interest Rates

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QE and Ultra-Low Interest Rates summary
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Rating

7 Overall

8 Importance

6 Innovation

8 Style


Recommendation

Thanks to extraordinary central bank actions in the aftermath of the 2008 financial crisis, interest rates remain at historic lows. These “ultra-low” rates have played a major role in helping countries and companies recover from recessionary conditions. Low rates yield numerous benefits: Governments, corporations and individuals pay less to borrow; higher-yielding corners of the bond market, such as emerging markets, receive more attention from investors; and companies can expand and profit. But this picture will alter drastically when rates eventually rise, and those prepared for such an increase will be better able to weather the change. This accessible, well-documented report offers an overview of these unprecedented monetary policies and their possible consequences as they unwind. getAbstract recommends it to investors, consumers, executives and business owners who are concerned about higher interest rates on the horizon.

In this summary, you will learn

  • Why monetary policies in advanced economies have kept interest rates so low for so long,
  • Who the winners and losers are in an environment of low interest rates, and
  • How the economy will change once interest rates rise.
 

About the Author

The McKinsey Global Institute is the research arm of McKinsey & Company.

 

Summary

Financial Stress Pushes Rates Lower
To avert an economic meltdown after the most recent financial crisis and to stabilize the financial system, central banks in the developed economies drove interest rates lower. Several years later, economists continue to debate the “distribution effects...

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