17 days ago • Posted by William Ramstein

Academics argue the main force driving down interest rates is income inequality, not demographics

This matters for investors because the demographic trend that has put pressure on rates is set to reverse while the trend towards greater income inequality looks like it's locked in place. Please use the sharing tools found via the share button at the top or side of articles. Because a person can only consume so much, the wealthy few tend to save much of this income rather than spend it. This pushes rates down directly, when those savings are invested, driving asset prices up and yields down; and indirectly, by sapping aggregate demand. Source: FT

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