Speculation is that the Fed Reserve will raise interest rates in December. Reason given is that they believe the economy is more or less back on track. I think they should have raised rates a long time ago. ZIRP is killing retirees who are on a fixed income.
If your retirement depends on savings account interest or short term CDs, you're doing it wrong.
ZIRP always kills an economy. That’s its history. Think what it does to business investment. We know that it is not the market rate (think supply and demand curves for money). So how do you invest long term knowing that rates aren’t real?
For instance, the rule of thumb in RE is for every 1% uptick in interest rates you have to lower the RE price 10-12% to keep the same payment. Do the calcs yourself to prove it.
So you buy a house for $250K at 4%. Unless inflation kicks in or massive income growth across all incomes, then when you go to sell it and rates are 5% you’ll have to lower the price 10%. You’re literally making yourself poorer.
Chinese and ME money poured into the coastal cities and into Chicago. That’s the bump you’re seeing in RE. Don’t be fooled. That money is a savings account against home country political risk.
Let the market rule and you don’t have this kind of corruption. Actually, free markets kill corruption.