November 26, 2020

Room For Debate: The Sorry Lot of the Risk-Averse Saver

Introduction

retirees Srdjan Srdjanov/Dreamstime.com

The Federal Reserve’s policy of keeping interest rates at rock bottom is meant to stimulate the economy and encourage people to invest and borrow. But as a recent Wall Street Journal article notes, it also means that people who simply want to save money — especially those who are older or those who cannot manage the complexities of a financial portfolio — continue to be caught in a bind. They either lose ground, because interest rate returns are low while food and energy costs are going up, or they have to consider making investments that are relatively risky and require longer term commitment.

What does this mean for the financial security of cautious small savers? If they are going to lose ground, what incentive do they have to save in the first place?

 Read the Discussion »

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Topics: Economy, Federal Reserve, inflation, interest rates, savings

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Article source: http://feeds.nytimes.com/click.phdo?i=615f47b8800b1d419d198865f3de85f6

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