Negative interest rates, how long will that last?

Treasury yields hit new lows after central banks opened the door to a rate cut. Investors are anticipating new monetary stimulus and expect interest rates to fall even further as a result. At the same time, equities are in demand, because negative interest rates have made the dividend yield even more interesting. We are also seeing a flight towards precious metals, as the gold price reached the highest level in six years.

Due to the extremely low interest rates, all investments seem to be rising in value again. But negative interest rates are creating new problems. For example, it is more difficult for pension funds to make a return, while savers also lose out. The interest rate on savings is already zero, while the banks even have to pay a penalty interest on deposits that they park with the central bank. As a result, the profitability of the banking sector is also under pressure.

How dangerous is negative interest rates?

We are in a dangerous negative spiral, in which interest rates only seem to be under further pressure. On the one hand through savings surpluses and on the other hand through a flight to safety. Bee RTL-Z Stock market commentator Hans de Geus and Hendrik Jan Tuch of Aegon discuss the consequences of extremely low interest rates and the stimulative policy of central banks. Will negative interest rates become the new normal? And how should you deal with that as a saver? Will people stop saving or will they turn to alternatives?

There is a danger that new bubbles will emerge, because people are now starting to invest more riskily. This is a worrying development, because central banks can drown out the market signals with their policies. So it's not surprising that more investors are seeking refuge in safe havens like precious metals. Click on the image below to watch the video clip.

Negative interest rates: how long can this last?