Could interest rates in America move to 0% or even into the negative? Possibly.

Did you know that there are $11 trillion in bonds that are yielding a negative return in Europe and Japan?

So the question becomes, could this happen in America? Or further yet, what could cause this to happen?

Some of you may have heard that the President is calling for the Federal Reserve to reduce rates to 0% and or negative. If this occurs, what would it mean for Americans?

For home and business owners this could be great. However, for seniors living on bank interest, this would have a negative impact. In terms of stocks, it may be good as the majority of investors leave bank products paying low interest and choose to buy stocks and real estate. But for banks trying to make a profit, this would be a highly undesirable move.

It has been a decade since rates have been cut, and now we’ve experienced two this year. Not to mention there is still talk of two more by the year’s end.

From my perspective, here are two reasons why these additional cuts may occur:

1. The Feds are trying to manage the already decade long growth of the economy, which by all accounts looks as if it will be continuing for another year possibly.
2. If our rates were weaker, we would have a weaker dollar which would make our goods and services more attractive to other countries. With our dollar so strong, we can buy other countries goods and services cheaper but ours are expensive. For our economy to be strong we want our dollar more in line with other major currencies, so this move would assist with that.

The fundamental fact of financing/investing and the economy is this - all moves help some, and put pressure on others. The key is to position yourself to take advantage of change.