Ultra-Low Interest Rates for the Foreseeable Future

Interest rate levels impact appropriate investment allocation considerations in a multitude of ways, including:

• The relative advantages of investing in capital markets versus paying down debt like mortgages and students loans

• Pros and cons of allocating to bonds based on their respective durations

• The cost of capital for companies with investment grade and high-yield debt ratings

Those and myriad other considerations contribute to the importance of an investor understanding interest rates. 

As this Bloomberg article notes, the Federal Open Market Committee projects that its policy benchmark rate will likely remain near zero through 2022.

Read more on this subject here: https://www.bloomberg.com/news/articles/2020-06-10/fed-puts-floor-under-bond-buying-sees-zero-rates-through-2022?srnd=premium

— Anthony Winkels is Managing Partner and Wealth Advisor at Fortis Wealth Management