Remarks
Investors Leap at Chance to Double Their Money in 1,387 Years
Money pours in after the Federal Reserve raises its interest rate to 0.05% (from zero).
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Want to know how sensitive investors are to tiny differences in interest rates? Look at what happened after the Federal Reserve decided June 16 to raise the rate it pays on its overnight reverse repurchase facility to 0.05% from 0.00%. You’d need 1,387 years to double your money at that puny rate. Still, it was enough to draw in $756 billion in funds on June 17, a 45% increase from when the Fed was paying a flat zero.
That’s “just another affirmation of the glut of cash seeking any positive return,” Jonathan Cohn, a strategist at Credit Suisse Group AG, told Bloomberg.