The Danger of Plunging Interest Rates and Delayed Buying
When patience isn’t a virtue.
Keyairra Wright, 32, of Bridgeport, Conn., is proud of being frugal. “I have clothes since I was a first-year teacher in 2008,” says Wright, who switched careers this year from teaching math to developing educational software. “There are no holes in them. They may not be the latest fashion, but they serve the functions that clothes serve.”
Writ large, frugality like hers may be one explanation there’s almost $16 trillion of debt worldwide with a yield of less than zero. Patience, thrift, and caution might be too much of a good thing, contributing to a glut of savings. People no longer have to be bribed with a high interest rate to save rather than consume. The yield on 30-year U.S. Treasury bonds, while not negative, fell to a record low on Aug. 14.