[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-0-en-105":3,"doc-seo-323007-105":59,"doc-detail-323007-en":130},{"code":4,"msg":5,"data":6},0,"success",[7,13,18,23,28,33,38,43,48,51,55],{"id":8,"doc_module":4,"doc_module_name":9,"category_name":10,"show_sort_weight":11,"slug":12},1,"Document","Story & Novel",90,"story-novel",{"id":14,"doc_module":4,"doc_module_name":9,"category_name":15,"show_sort_weight":16,"slug":17},2,"Literature",80,"literature",{"id":19,"doc_module":4,"doc_module_name":9,"category_name":20,"show_sort_weight":21,"slug":22},4,"Exam",70,"exam",{"id":24,"doc_module":4,"doc_module_name":9,"category_name":25,"show_sort_weight":26,"slug":27},5,"Comic",60,"comic",{"id":29,"doc_module":4,"doc_module_name":9,"category_name":30,"show_sort_weight":31,"slug":32},6,"Technology",50,"technology",{"id":34,"doc_module":4,"doc_module_name":9,"category_name":35,"show_sort_weight":36,"slug":37},7,"Healthcare",40,"healthcare",{"id":39,"doc_module":4,"doc_module_name":9,"category_name":40,"show_sort_weight":41,"slug":42},8,"Research & Report",30,"research-report",{"id":44,"doc_module":4,"doc_module_name":9,"category_name":45,"show_sort_weight":46,"slug":47},9,"Religion & Spirituality",20,"religion-spirituality",{"id":46,"doc_module":4,"doc_module_name":9,"category_name":49,"show_sort_weight":46,"slug":50},"World Cup","world-cup",{"id":52,"doc_module":4,"doc_module_name":9,"category_name":53,"show_sort_weight":52,"slug":54},10,"Lifestyle","lifestyle",{"id":56,"doc_module":4,"doc_module_name":9,"category_name":57,"show_sort_weight":24,"slug":58},19,"General","general",{"code":4,"msg":60,"data":61},"ok",{"site_id":62,"language":63,"slug":64,"title":65,"keywords":66,"description":67,"schema_data":68,"social_meta":123,"head_meta":125,"extra_data":127,"updated_unix":129},105,"en","economic-commentary-why-are-interest-rates-so-low","ECONOMIC CoMMENTARY - Why Are Interest Rates So Low?","","Economic Commentary explains why interest rates stay at historically low levels by breaking the overall level into distinct components. It draws on Federal Reserve Bank of Cleveland work to separate credit risk from riskless Treasury rates and separates nominal interest into real return plus expected inflation. It also addresses how breakeven inflation measures can be distorted by inflation risk premia, uncertainty about future inflation, and differences between nominal bonds and TIPS.",{"@graph":69,"@context":122},[70,84,105],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/economic-commentary-why-are-interest-rates-so-low/323007/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/economic-commentary-why-are-interest-rates-so-low/323007.png","ImageObject",300,407,{"name":92,"@type":93},"Genevieve","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-28","2026-09-21",true,{"@type":102,"interactionType":103,"userInteractionCount":52},"InteractionCounter",{"@type":104},"ViewAction",{"@type":106,"mainEntity":107},"FAQPage",[108,114,118],{"name":109,"@type":110,"acceptedAnswer":111},"Why do credit risk and riskless rates both matter for interest rates?","Question",{"text":112,"@type":113},"Interest rates incorporate compensation for credit risk: lenders charge a risk premium when repayment is uncertain. Separating this from the riskless rate helps identify what is driving overall low rates.","Answer",{"name":115,"@type":110,"acceptedAnswer":116},"How are nominal and real interest rates related in the commentary?",{"text":117,"@type":113},"Nominal rates can be separated into the real interest rate plus the expected inflation rate. When inflation is higher, nominal rates tend to be higher even if the real rate is unchanged.",{"name":119,"@type":110,"acceptedAnswer":120},"Why can the TIPS breakeven inflation measure overstate inflation expectations?",{"text":121,"@type":113},"Because nominal bonds include additional risk premia for unexpected inflation, the breakeven difference between nominal Treasury bonds and TIPS may reflect that risk. This makes the measure not quite right as a direct inflation expectation proxy.","https://schema.org",{"og:url":83,"og:type":124,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":126,"canonical":83},"index,follow",{"doc_id":128,"site_id":62},323007,1790459257,{"code":4,"msg":5,"data":131},{"doc_id":128,"user_id":132,"nickname":92,"user_avatar":133,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":134,"file_id":135,"file_url":136,"file_type":137,"file_size":138,"view_count":52,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":24,"language":139,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":140,"faqs":141,"seo_title":142,"seo_description":67,"update_tm":143,"read_time":144,"preview_page_count":4},1374391974585,"https://ap-avatar.wpscdn.com/davatar_276721f389ce27ea32af1340a28f341c","# ECONOMIC CoMMENTARY\n\nWhy Are Interest Rates So Low?  \nJoseph G.Haubrich  \nInterest rates have been at historical lows for some time now.There are many possible reasons why that is so.Wemake use of recent work done at the Federal Reserve Bank of Cleveland that allows us to look at individual componentsof interest rates and see which are exerting the biggest influence.Knowing why rates are where they are now helps topredict where interest rates willlikely be in the near future.  \nAs anyone following the financial news,refinancing a mort-gage,or even checking their savings account knows,interestrates remain at historically low levels.But interest rates canbe,and have been,much higher.Rates on the three-monthTreasury bill hit nearly 15 percent in early 1982,whenOlivia Newton John topped the charts with “Physical”andOzzie Osbourne gained notoriety for biting the head offa bat.Now,while you were uploading your video of the\"Harlem Shake,\"and Kelly is the Osbourne most in thepublic eye,rates are down below one-tenth of one percent,a rate that,prior to the crisis,hadn't been seen since GlennMiller topped the charts with “Chattanooga Choo Choo.”  \nWhat is keeping interest rates so low?The question canbe answered on many levels,and though some people arequick to assign credit (or blame)to the Federal Reserve,China,or the current administration,more practical an-swers follow from eschewing the politics and looking at thequestion from an investment standpoint.  \nIn this Economic Commentary we take that approach,makinguse of recent work done here at the FederalReserve Bankof Cleveland,which breaks interest rates apart into the vari-ous factors that determine what those rates will be.Lookingat these components allows us to see which are exerting thebiggest effects and helps to predict where interest rates willlikely be in the near future.  \n## Breaking Up Is Hard to Do\n\nA variety of components contribute to the level of interestrates,and looking at each one separately will give us a goodidea of the factors behind low rates.  \nOne of the largest contributors to the level of interest ratesis credit risk.This reflects the difference between risky andriskless debt-between debt that might not be paid back anddebt that almost certainly will be repaid.Lenders demand ahigher interest rate for taking on credit risk,something thefinancial trade calls a risk premium.Many of the interestrates consumers normally deal with have this sort of risk-rates on credit cards,mortgages,and auto loans.We won'ttalk much about credit risk in this Commentary,because nail-ing down riskless debt will tell us a lot about what is drivinginterest rates.  \nSince the credit risk premium is on top of the interest ratecharged for riskless debt,the first step is to understand whatmoves that riskless rate around.We will concentrate on U.S.Treasury securities,taking them as riskless,which still seemsa safe assumption,though perhaps not as blatantly obviousas in the days before the fiscal cliff and the downgrade byStandard&Poor's.  \nThe next big contributor to rates is inflation.This reflectsthe difference between real and nominal interest rates.Withordinary Treasury bonds,people lend money to the U.S.government,but when they get their money back(with inter-est),each dollar they receive is worth less because of inflation.Thus,adjusting for inflation,the real rate of interest theyreceive is less than the nominal,or dollar,rate of interest.  \nThis means that the nominal interest rate can be separatedinto the real rate plus the expected inflation rate.In otherwords,if investors hope to get a real return of 3 percent onwhat they lend,and they expect inflation to be 2 percent,they charge 5 percent interest.That's why times of highinterest rates often correspond to times of high inflation.  \nThe separability of the nominal rate into the real rate andexpected inflation also suggests a quick way to gauge mar-ket expectations of inflation:look at the difference betweennominal and real Tr","cbCairmKyjZn2hKt","https://ap.wps.com/l/cbCairmKyjZn2hKt","pdf",1319155,"English","# Breaking Up Is Hard to Do\n## Components behind low rates\n## Credit risk and riskless Treasury rates\n## Real versus nominal interest rates\n## Breakeven inflation and its limitations","[{\"question\":\"Why do credit risk and riskless rates both matter for interest rates?\",\"answer\":\"Interest rates incorporate compensation for credit risk: lenders charge a risk premium when repayment is uncertain. Separating this from the riskless rate helps identify what is driving overall low rates.\"},{\"question\":\"How are nominal and real interest rates related in the commentary?\",\"answer\":\"Nominal rates can be separated into the real interest rate plus the expected inflation rate. When inflation is higher, nominal rates tend to be higher even if the real rate is unchanged.\"},{\"question\":\"Why can the TIPS breakeven inflation measure overstate inflation expectations?\",\"answer\":\"Because nominal bonds include additional risk premia for unexpected inflation, the breakeven difference between nominal Treasury bonds and TIPS may reflect that risk. This makes the measure not quite right as a direct inflation expectation proxy.\"}]","ECONOMIC CoMMENTARY - Why Are Interest Rates So Low? | PDF",1789964112,13]