Real interest rate is the rate of interest an investor, saver or lender receives (or expects to receive) after allowing for inflation. It can be described more formally by the Fisher equation, which states that the real interest rate is approximately the nominal interest rate minus the inflation rate. Real interest rates are important because they measure the real return on investments. They are used to compare the effectiveness of investments in different countries, since the nominal interest rate does not take into account the effect of inflation. 1. "Real Interest Rates: A Primer" This article provides an overview of real interest rates, including how to calculate them, their importance, and their impact on investments. It also discusses the different types of real interest rates and their uses. 2. "What is the Real Interest Rate?" This article explains what the real interest rate is and why it matters. It also provides an overview of how real interest rates are calculated and used. 3. "Real Interest Rates: What Investors Need to Know" This article provides an overview of real interest rates and their importance for investors. It discusses how to calculate real interest rates, their impact on investments, and their uses.
(Bloomberg) -- Billionaire Ray Dalio, founder of Bridgewater Associates, said the US is seeing stubbornly high inflation along with elevated real interest rates. Most Read from BloombergThese Are the World’s 20 Most Expensive Cities for Expats in 2023Tech Stocks Sputter as Traders Consider July Hike: Markets WrapFlights to LaGuardia Airport Grounded as Smoke Blankets NYCDam Destroyed in the Dead of Night Upstages Ukraine’s CounteroffensiveGeorge Santos Loses Bid to Shield the People Who Guarante
The Reserve Bank of India has kept interest rates unchanged for the second consecutive meeting of the Monetary Policy Committee, with the repo rate remaining at 6.5%. Governor Shaktikanta Das suggested that the real interest rate meant a cut in policy rates was possible as the interest rate cycle may have peaked. The inflation target mandate, a monetary policy objective aimed at controlling the rate of price increases, emerged in 2016 after years of price increases led to negative real interest rates and spawned financial instability.
In standard models, a big dose of AI boosts productivity, which in turn boosts the return on capital, which then raises real interest rates. I am less convinced. For one thing, I believe most of the gains from truly fundamental innovations are not captured by capital. Was Gutenberg a billionaire? The more fundamental the innovation, […]
Back in late 2008, I argued that tight money was driving the economy into a deep recession. One counterargument was that interest rates had declined over the past year. I pointed out that interest rates are a misleading indicator of the stance of monetary policy. The response would be something like,
Imagine if the relevant “change variable,” in macro terms, was the ease and quality of matching. In some mini-eras, matching does not work very well. The labor market is slow, real interest rates are low, and capital is very cheap. It is thus relatively easy for super-talented people — who often become quite wealthy — […]
Still, JPMorgan says the US sharemarket faces valuation risk from “higher for longer” rates. A 16 per cent year-to-date rise in the S&P 500 was driven by valuation. But real interest rates and the … Read Full Story at source (may require registration)
The decline in ETF activity is linked to rising real interest rates in the US, which reached a 15-year high of 2.47% for 10-year TIPS. This trend has diminished the appeal of non-yielding gold, indicating that the recent 9% increase in gold prices since October 6th was primarily due to speculative safe-haven demand
The relationship between the US dollar and gold is often characterized by an inverse correlation. When the US dollar weakens, gold prices tend to rise and vice versa. Earlier, gold prices in the international markets were primarily driven by real interest rates. Robust US economic release boosted bets of higher-for-longer rates which ended up lifting the US currency and bond yields.