Savers may find invest their money elsewhere, in the stock market, mutual funds or otherwise, or simply, spend it while interest rates for fixed deposits remain this low.
But the needy, who struggle with day-to-day expenses, may not have time to look at other investments. In addition, they may have a poorer credit history that discounts them from taking advantage of the benefits of low interest loans.Historically, we have seen consumers purchase durable goods such as houses and cars when the interest rates are low.
When mortgages were reset at higher interest rates, there was a huge number of defaults. The long-lasting consequences of the subprime mortgage crisis included a deep recession of the US economy that did not recover until years later and a global financial crisis that has accelerated geopolitical shifts.